The maximum total NPV your firm can achieve through allocating its 29 NZT-48 pills across these four projects is $$.

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
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Problem 2TP: Austins cell phone manufacturer wants to upgrade their product mix to encompass an exciting new...
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Your firm has acquired a bag of 29 pills of the cognitive-enhancing, nootropic drug called NZT-48. This has opened up four new potential projects for your firm that would not be possible with only your regular unenhanced employees’ feeble meatbag brains. Each project is non-repeatable and of equal time. You have calculated the NPV of each project as well as the requested number of NZT-48 pills by each project’s exploratory team:

Project Codename NPV Pills Requested
Commodus $42,800 14
Caligula  $70,500 20
Nero  $24,150 5
Elagabalus   $72,200 19

 

Assume that you can do partial projects whereby you can allocate less pills than the number requested by the team. This would give you a pro-rata portion of that project’s NPV (i.e. the amount of pills you allocate as a proportion of the number requested). 

The maximum total NPV your firm can achieve through allocating its 29 NZT-48 pills across these four projects is $$.
(Round up to the nearest dollar)

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