The maximum total NPV your firm can achieve through allocating its 29 NZT-48 pills across these four projects is $$.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
icon
Related questions
Question

Your firm has acquired a bag of 29 pills of the cognitive-enhancing, nootropic drug called NZT-48. This has opened up four new potential projects for your firm that would not be possible with only your regular unenhanced employees’ feeble meatbag brains. Each project is non-repeatable and of equal time. You have calculated the NPV of each project as well as the requested number of NZT-48 pills by each project’s exploratory team:

Project Codename NPV Pills Requested
Commodus $42,800 14
Caligula  $70,500 20
Nero  $24,150 5
Elagabalus   $72,200 19

 

Assume that you can do partial projects whereby you can allocate less pills than the number requested by the team. This would give you a pro-rata portion of that project’s NPV (i.e. the amount of pills you allocate as a proportion of the number requested). 

The maximum total NPV your firm can achieve through allocating its 29 NZT-48 pills across these four projects is $$.
(Round up to the nearest dollar)

Expert Solution
steps

Step by step

Solved in 4 steps

Blurred answer
Knowledge Booster
Capital Budgeting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Essentials Of Investments
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
FUNDAMENTALS OF CORPORATE FINANCE
FUNDAMENTALS OF CORPORATE FINANCE
Finance
ISBN:
9781260013962
Author:
BREALEY
Publisher:
RENT MCG
Financial Management: Theory & Practice
Financial Management: Theory & Practice
Finance
ISBN:
9781337909730
Author:
Brigham
Publisher:
Cengage
Foundations Of Finance
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education