Question
KB owns 57% shares of a firm, which has initial endowment of $76,495. The firm has identified three non-divisible feasible projects: Project-X requires $27,746 investment
KB owns 57% shares of a firm, which has initial endowment of $76,495. The firm has identified three non-divisible feasible projects: Project-X requires $27,746 investment now to generate $33,735 next year; Project-Y requires $20,240 investment now to generate $35,959 next year; and Project-Z requires $48,153 investment now to generate $61,744 next year. The firm invests in projects reasonably to maximise wealth. Average expected rate of return from market is 16%. If KB wants to consume 42% of current dividend now, how much fund would be availableto KB in next year?
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