The Following Table Gives the Available Projects (In $Millions)for a Firm

question 39

Multiple Choice

The following table gives the available projects (in $millions) for a firm.

If the firm has a limit of $210 million to invest, what is the maximum NPV the company can obtain?

• A)200
• B)283
• C)307
• D)347

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Definitions:

Consumer Surplus

The difference between what consumers are willing to pay for a good or service and what they actually pay, representing the benefit to consumers.

Willingness to Pay

The maximum amount an individual is prepared to spend to acquire a good or service or avoid something undesirable.

Consumer Surplus

The gap between what consumers are prepared to pay for a product or service and what they end up spending.

Market Price

The current value at which a good or service is bought or sold in the market, typically influenced by the forces of supply and demand.