Use the Table for the Question(s) Below -Assuming That Your Capital Is Constrained, Which Project Should You

question 49

Multiple Choice

Use the table for the question(s) below.
Consider the following list of projects:
$\begin{array} { l r r } \hline \text { Project } & \text { Investment } & \text { NPV } \\\hline \text { A } & 135,000 & 6,000 \\\hline \text { B } & 200,000 & 30,000 \\\hline \mathrm { C } & 125,000 & 20,000 \\\hline \mathrm { D } & 150,000 & 2,000 \\\hline \mathrm { E } & 175,000 & 10,000 \\\hline \mathrm { F } & 75,000 & 10,000 \\\hline \mathrm { G } & 80,000 & 9,000 \\\hline \mathrm { H } & 200,000 & 20,000 \\\hline \mathrm { I } & 50,000 & 4,000 \\\hline\end{array}$
-Assuming that your capital is constrained, which project should you invest in first?

• A) Project F
• B) Project C
• C) Project B
• D) Project G

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Definitions:

Financial Reporting

The process of producing statements that disclose an organization's financial status to management, investors, and the government.

Inventory Cost Flow Assumption

A method used in accounting to determine the cost of goods sold and ending inventory value, examples include FIFO, LIFO, and average cost methods.