Question
Company H can allocate up to $500,000 for new projects. Evaluate the five potential projects below and select the optimal ones to maximize NPV. Calculate
Company H can allocate up to $500,000 for new projects. Evaluate the five potential projects below and select the optimal ones to maximize NPV. Calculate the IRR for the chosen portfolio.
Project | Investment ($000) | NPV ($000) | IRR (%) |
1 | 150 | 35 | 14.0 |
2 | 100 | 20 | 12.0 |
3 | 200 | 45 | 16.0 |
4 | 100 | 15 | 11.0 |
5 | 200 | 40 | 15.0 |
- Stay within the $500,000 budget.
- Maximize NPV.
- Calculate the portfolio's IRR.
- Provide total investment.
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Investment Science
Authors: David G. Luenberger
2nd Edition
0199740089, 978-0199740086
