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You are in charge of one division of a company. Your division is subject to capital rationing. Your division has 4 indivisible projects available, detailed
You are in charge of one division of a company. Your division is subject to capital rationing. Your division has 4 indivisible projects available, detailed as follows:
Project Initial Outlay IRR
1 $2m 18%
2 $1m 15%
3 $1m 10%
4 $3m 9%
If you must select projects to a budget constraint of $5m, which set of projects should be accepted so as to maximize firm value?
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