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Combination projects that provide highest in firm value

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Reference no: EM131114003

Assume your firm faces the following investment opportunities:

Project Initial Cash Flows IRR NPV PI

Shs.000 Sh.000

A 50,000 15% 12,000 1.24

B 35,000 19 15,000 1.43

C 30,000 28 42,000 2.40

D 25,000 26 1,000 1.04

E 15,000 20 10,000 1.67

F 10,000 37 11,000 2.10

G 10,000 25 13,000 2.30

H 1,000 18 100 1.10

If the budget ceiling for initial cash flows during the present period is Shs.65,000,000 and the proposals are independent of each other, your aim should be to select the combination projects that provide the highest in firm value the Shs.65 m can deliver.

Reference no: EM131114003

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