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Okay I got this question on a quiz and I have no idea how to go about getting the capital rationing constraint, help me pls
Okay I got this question on a quiz and I have no idea how to go about getting the capital rationing constraint, help me pls lol.
A firm has set a budget constraint of $200,000 on new investments, which cannot be exceeded. Given the following independent investments, what is the loss to the firm from the capital rationing constraint?
Alpha:
CF: $80 000
PI: 1.20
Delta:
CF: $120 000
PI: 1.13
Gamma:
CF: $140 000
PI: 1.10
Alpha:
CF: $85 000
PI: 1.15
a) $15,738
b) $17,762
c) $20,500
d) $31,500
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