You are chairperson of the investment committee at your firm. Five projects have been submitted to your committee for approval this month. The investment required and the project profitability index for each of these projects are presented in the following table: Project Investment PI A $20,400 2.500 B 51,000 2.000 C 71,400 1.750 D 10,200 1.000 E 81,600 0.800 If you have $510,000 available for investments, which of these projects would you approve? Assume that you do not have to worry about having enough resources for future investments when making this decision. Definitely Accept: - Projects A,B and E - Porjects C,D, and E - Projects B, C, and E - Projects A, B, and C - Projects A, D, and E - Projects A, B, and D
You are chairperson of the investment committee at your firm. Five projects have been submitted to your committee for approval this month. The investment required and the project profitability index for each of these projects are presented in the following table: Project Investment PI A $20,400 2.500 B 51,000 2.000 C 71,400 1.750 D 10,200 1.000 E 81,600 0.800 If you have $510,000 available for investments, which of these projects would you approve? Assume that you do not have to worry about having enough resources for future investments when making this decision. Definitely Accept: - Projects A,B and E - Porjects C,D, and E - Projects B, C, and E - Projects A, B, and C - Projects A, D, and E - Projects A, B, and D
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
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You are chairperson of the investment committee at your firm. Five projects have been submitted to your committee for approval this month. The investment required and the project profitability index for each of these projects are presented in the following table:
| Project | Investment | PI | ||
| A | $20,400 | 2.500 | ||
| B | 51,000 | 2.000 | ||
| C | 71,400 | 1.750 | ||
| D | 10,200 | 1.000 | ||
| E | 81,600 | 0.800 |
If you have $510,000 available for investments, which of these projects would you approve? Assume that you do not have to worry about having enough resources for future investments when making this decision.
Definitely Accept:
- Projects A,B and E
- Porjects C,D, and E
- Projects B, C, and E
- Projects A, B, and C
- Projects A, D, and E
- Projects A, B, and D
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