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Economics

The following projects are being considered by the Corporate Investment Committee who has an investment budget of $1,000,000.

a. Which ones should be funded based on NPV assuming a 6% interest rate? Your Budget is Only $1,000,000.

b. Which ones should be funded using a 3 year or less payback period criterion?

Project Years Up Front (Y 0) Cost each year after first Benefits each year after first
V 6 $500,000 0 $110,000
W 6 $250,000 $40,000 $100,000
X 5 $400,000 $100,000 $200,000
Y 3 $300,000 $25,000 $150,000
Z 4 $150,000 $200,000 $250,000

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Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M973348

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