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

question 58

Multiple Choice

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

The firm has only $20 million to invest. What is the maximum NPV that the company can obtain?

• A)3.5
• B)4.0
• C)4.5
• D)5.0

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Definitions:

Specialize

Concentrating on and becoming expert in a particular subject or skill.

Comparative Advantage

The ability of an individual, firm, or country to produce a good or service at a lower opportunity cost than competitors, enabling more efficient trade.

Production Possibilities Line

A curve depicting all maximum output possibilities for two goods, given a set of inputs.