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Question 2) A firm is trying to decide which projects to undertake. The firm has 4 potential projects, each of which has a positive net
Question 2) A firm is trying to decide which projects to undertake. The firm has 4 potential projects, each of which has a positive net present value. However, the firm is constrained to spending a total of at most $100 million on new projects. Thus, the firm cannot afford to accept all 4 potential projects. All projects have a positive initial cost, and for all projects, all future cash flows are expected to be inflows. The initial cost, net present value, and profitability index for each project are given below. Which set of projects should the firm accept? 1) The firm should accept projects A and D. 2) The firm should accept only project D. 3) The firm should accept projects A, B, and C. 4) The firm should accept projects A and C
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