XY Company is considering 5 investment projects as follows: ProjectInvestment ($)Profitability index (PI)A10,0001.2B6,0001.1C18,0001.6D14,0000.9E12,0001.3The company has $30,000 available for investment. Projects C and E are mutually exclusive. All projects can be undertaken only once and are not divisible.Required:Calculate the projects’ NPV

NPV of a project is the sum of all the cash in flow and outflows. Profitability index (PI) is…

Answered: XY Company is considering 5 investment…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter12: Capital Budgeting: Decision Criteria

Section: Chapter Questions

Problem 13P

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XY Company is considering 5 investment projects as follows:

Project	Investment ($)	Profitability index (PI)
A	10,000	1.2
B	6,000	1.1
C	18,000	1.6
D	14,000	0.9
E	12,000	1.3

The company has $30,000 available for investment. Projects C and E are mutually exclusive. All projects can be undertaken only once and are not divisible.

Required:

Calculate the projects’ NPV

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