An Investor Has a Budget of $5 Million

question 19

Multiple Choice

$\begin{array} { l c l } & \text { Initial Investment } & { \text { Cash flow } } \\\text { Project A } & \text { \$5 million } & \$ 2 \text { million per year for four years } \\\text { Project B } & \$ 3 \text { million } & \$ 1 \text { million per year for five years } \\\text { Project C } & \text { \$2 million } & \$ 1 \text { million per year for four years } \\\text { Project D } & \$ 3 \text { million } & \$ 1.5 \text { million per year for three years }\end{array}$
An investor has a budget of $5 million. He can invest in the projects shown above. If the cost of capital is 6%, what investment or investments should he make?

• A) Project A
• B) Project B
• C) Project B and Project C
• D) Project C and Project D

---

Definitions:

Measures

Quantitative or qualitative tools and techniques used to assess or quantify variables of interest in various fields, including psychology.

Poor Reliability

The lack of consistency in a measurement, test, or evaluation, indicating that it cannot be depended on to yield the same results upon repetition.

Personality Tests

are assessments designed to measure and evaluate individuals' characteristic patterns of behavior, thought, and emotion, often to identify personality traits.

Correlation Coefficient

A statistical measure that denotes the degree to which two variables are linearly related, ranging from -1 to +1.