Use the Table for the Question(s)below

question 105

Multiple Choice

Use the table for the question(s) below.
Consider the following list of projects:

-Assume that your capital is constrained, so that you only have $500 000 available to invest in projects. If you invest in the optimal combination of projects given your capital constraint, then the total net present value (NPV) for all the projects you invest in will be closest to:

• A)$58 000
• B)$111 000
• C)$69 000
• D)$80 000

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Definitions:

Closed Economy

An economy that does not engage in international trade with other economies, neither importing nor exporting goods and services.

Government Deficit

The financial situation in which a government's expenditures exceed its revenues within a given fiscal period, leading to borrowing or debt accumulation.

Private Saving

The portion of households' income that is not consumed or paid in taxes, and is instead saved for future use.

Macroeconomist

An economist who focuses on broad issues such as inflation, unemployment, and national economic growth.