NPV and the respective initial investments required. All of these projects are independent. Project NPV Investment I 2,500 2,500 II 4,000 20,000 III 7,500 30,000 IV 8,000 40,000 V 2,000 10,000 VI 2,500 5,000 Lewis has an investment con
Dividend Policy
A dividend is a part of the profit paid to the shareholder in an organization. The management of the organization has the right to decide the policy for giving a dividend from the earnings to the shareholder. However, an organization is not in the obligation to declare a dividend for the investor. Dividend policy differs from organization to organization. As the management has the only authority to decide dividend rate, dividend amount, and time of dividend payout by considering all other elements that create an impact on the payment of a dividend.
Stocks And Dividends
Stock or equities are generally sold and bought in the Stock Exchange or which is popularly known as the stock market. Stocks are issued in the Stock Exchange for the sole purpose of raising funds for the Corporation or the company itself. Now since an individual has purchased a portion of the Corporation or company, he or she may claim to be a part of the earnings or profit of the company.
Lewis Services is evaluating six investment opportunities (projects). The following table reflects each project’s
Project NPV Investment
I 2,500 2,500
II 4,000 20,000
III 7,500 30,000
IV 8,000 40,000
V 2,000 10,000
VI 2,500 5,000
Lewis has an investment constraint of P50,000. Which combination of projects would represent the optimal investment that should be recommended to Lewis
Choices
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