CAPITAL RATIONING A firm must determine what investment opportunities to undertake. The firm is limited to a maximum expenditure of $300,000 for this capital budgeting period. The firm has the following projects to invest: Yes/No Initial Investment NPV Project 1 2 3 4 Available Projects IRR 19% 21% 25% 22% 26% 20% 24% 28% 19% 15% Initial Investment $ 6,000 $ 9,500 $ 70,000 $ 65,000 $ 80,000 $ 100,000 $ 120,000 $ 135,000 $ 150,000 $ 250,000 5 $ $ $ $ $ $ $ $ $ $ NPV 500 11,000 50,000 15,000 6,000 160,000 75,000 40,000 38,000 45,000 PI 1.08 2.16 1.71 1.23 1.08 2.60 1.63 1.30 1.25 1.18 6 7 8 9 10 Total projects Total investment Total NPV