A firm is considering the following independent investments:

Project Investment NPV PI
F $50M $1.00M 1.02
G $80M $4.40M 1.06
H $60M $4.00M 1.07
I $70M ($3.00M) 0.96
J $40M $1.30M 1.03

In the absence of capital rationing, what is the total NPV of the projects that should be selected? Which projects should be selected if the company only has $200M to invest?
A) $7.70; F, G, H, J
B) $7.70; G, H, J
C) $10.70; F, G, H, J
D) $10.70; G, H, J
E) $13.70; F, G, H, J

D

Business

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