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Question 3: Suppose you are a financial manager and you have the following investment opportunities: Project Initial Investment/Cost (in $1,000) 1 400 2 100 NPV
Question 3: Suppose you are a financial manager and you have the following investment opportunities: Project Initial Investment/Cost (in $1,000) 1 400 2 100 NPV (in $1,000) 100 -20 300 3 200 4 150 150 5 250 100 Which of the following projects should you pursue if you have only $700,000 allocated for capital expenditures? How much does the budget limit cost the company in terms of forgone NPV? The opportunity cost of capital for each project is 12%
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