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There are 4 Projects (mutually exclusive real asset projects) to choose from. The total budget is Rs.1, 000          Project       Io=Investment (Rs)   IRR  NPV(Rs)               A:                  200                      40%  300               B:                  100                      40%  300               C:                  300                      35%  200               D:                  800                      30%  600   Which 3 projects you will choose from the above 4 real asset projects? We cannot pick all 4 Projects because the Budget Constraint is 1000 and the total investment in all 4 Projects is 1400 (=200+100+300+800).

There are 4 Projects (mutually exclusive real asset projects) to choose from. The total budget is Rs.1, 000          Project       Io=Investment (Rs)   IRR  NPV(Rs)               A:                  200                      40%  300               B:                  100                      40%  300               C:                  300                      35%  200               D:                  800                      30%  600   Which 3 projects you will choose from the above 4 real asset projects? We cannot pick all 4 Projects because the Budget Constraint is 1000 and the total investment in all 4 Projects is 1400 (=200+100+300+800).

Essentials Of Investments
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
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Question No 08:                                                                          Marks (10)

There are 4 Projects (mutually exclusive real asset projects) to choose from. The total budget is Rs.1, 000

         Project       Io=Investment (Rs)   IRR 

NPV(Rs)

              A:                  200                      40% 

300

              B:                  100                      40% 

300

              C:                  300                      35% 

200

              D:                  800                      30% 

600

 

Which 3 projects you will choose from the above 4 real asset projects?

We cannot pick all 4 Projects because the Budget Constraint is 1000 and the total investment in all 4 Projects is 1400 (=200+100+300+800).

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