Question

Suppose that a company has six non-mutually exclusive projects to consider for capital investment in table below. The company has only MM$300 available for investment. Which investment should be selected considering discount rate of 10%? Use NPV, GRR, and PI analysis. Discuss the results.

Project	0	1	2	3	4
A	- MM$100	+ MM$20	+ MM$40	+ MM$60	+ MM$80
B	- MM$150	- MM$50	+ MM$100	+ MM$100	+ MM$140
C	- MM$60	+ MM$20	+ MM$40	+ MM$40	-
D	- MM$100	+ MM$60	+ MM$60	+ MM$100	-
E	- MM$50	+ MM$20	+ MM$40	+ MM$60	+ MM$40
F	- MM$100	+ MM$30	+ MM$30	+ MM$30	+ MM$30

PLZ GIVE ANSWER IN WORD OR EXCELL and also ATTACH FILES

Answer 1

As per NPV analysis other than project F all other projects are profitable.

Cosidering NPV Project B have higher NPV and Also higher IRR & PI, So investing project B is more profitable,

For full utilisation of MM$300 the manager can use the following combination of projects,

1- Project B = MM$150

2- Project D = MM$100

3- Project E = MM$ 50

And get maximum outcome.