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You firm has $1,100,000 available to invest and has identified the following four potential projects (assume each has the same expected life span): Project Cost
You firm has $1,100,000 available to invest and has identified the following four potential projects (assume each has the same expected life span): Project Cost NPV B A -$200,000 $22,500 $475,000 - $500,000 C -$390,000 $45,400 D - $90,000 $9,900 All four projects have a positive NPV. The NPV decision rule says to accept all four, but the total cost of investing in all projects is higher than what the firm has available. Which combination of projects can the firm accept that will offer the highest total expected NPV? What is the highest total NPV the firm can expect given the limited budget? LO3 O The firm should select projects B, C, and D. The total expected NPV from these three projects is $130,300. The firm should select projects A, B, and D. The total expected NPV from these three projects is $153,200. O The firm should select projects A, B, and C. The total expected NPV from these three projects is $142,900. O The firm should select projects A, C, and D. The total expected NPV from these three projects is $171,450.
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