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Project A Capital Investment $6 million Cash Flow from Investment $1 million B $10 million $1.2 million C $17 million $2.5 million D $8 million $1.2 million E $12 million $1.7 million

Project A Capital Investment $6 million Cash Flow from Investment $1 million B $10 million $1.2 million C $17 million $2.5 million D $8 million $1.2 million E $12 million $1.7 million

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
Problem 1PS
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Hi there,

I am working on this problem, how do i solve it without using excel?

CCM ltd. has a budget of $32 million dollars to spend on these investments (the table attached). Choose the best combination of investments using the profitability index. The cost of capital is 6%. Cash flow from investments are all per year in perpetuity.

 

A Project Capital Investment $6 million Cash Flow from Investment $1 million B $10 million $1.2 million C $17 million $2.5 million D $8 million $1.2 million E $12 milliion $1.7 million
Transcribed Image Text:A Project Capital Investment $6 million Cash Flow from Investment $1 million B $10 million $1.2 million C $17 million $2.5 million D $8 million $1.2 million E $12 milliion $1.7 million
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