A firm has the following investment opportunities:
Investment $ 10,000
NPV $ 6,000
If the cost of capital is 10% and the capital budget is limited to $280,000, which project(s) should the firm undertake?
project A, B, and C
project A and C
project A and B
project A, B, and D
The investment decisions of a firm are generally known as the capital budgeting, or capital expenditure decisions. The firm's investment decisions would generally include expansion, acquisition, modernization and replacement of the long-term assets. Sale of a division or business (divestment) is also as an investment decision.
Decisions like the ...
The solution examines a firms investment opportunities.