Use the table for the question(s)below.
Consider the following list of projects:

-Assume that your capital is constrained, so that you only have $600 000 available to invest in projects. If you invest in the optimal combination of projects given your capital constraint, then the total net present value (NPV)for all the projects you invest in will be closest to:
A)$69 000
B)$80 000
C)$65 000
D)$111 000

Question

Use the table for the question(s)below.
Consider the following list of projects:
 
-Assume that your capital is constrained, so that you only have $600 000 available to invest in projects. If you invest in the optimal combination of projects given your capital constraint, then the total net present value (NPV)for all the projects you invest in will be closest to:
A)$69 000 
B)$80 000 
C)$65 000 
D)$111 000

Quizplus · Accepted Answer

Since we are constrained to only invest $600,000, we need to choose the projects that will give us the highest NPV within that limit. We can calculate the NPV for each project and then sort them in descending order. Cumulatively adding up the NPV values while staying under $600,000, the optimal combination of projects is the first six projects on the list, which gives us a total NPV of $80,000. Therefore, the best choice is B.

Use the Table for the Question(s)below