A company evaluating projects when there is a resource constraint should simply choose the projects with the highest NPV.

Question

Quizplus · Accepted Answer

When there is a resource constraint, the company should not only consider the NPV but also the availability of resources for each project. It may not be feasible to choose the project with the highest NPV if it requires more resources than the company can allocate. The company should prioritize projects with the highest NPV per unit of resources required.

A Company Evaluating Projects When There Is a Resource Constraint