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You have been entrusted with $10 million of your firms capital to invest, i.e., you can invest up to, and no more than, $10 million
You have been entrusted with $10 million of your firms capital to invest, i.e., you can invest up to, and no more than, $10 million in new projects. You have 3 projects to choose from and they have the following free cash flows: Project Year o Year 1 Year 2 A -5 o 10 B -4 2 6 C -5.5 3 8 All figures are in millions. If the opportunity cost of capital for all 3 projects is 10%, the most NPV you can create for the firm is closest to: $3.8 million $6.6 million $6.0 million $2.8 million $3.3 million
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