Use the Table for the Question(s)below

question 131

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 $600,000 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)$65,000
• B)$80,000
• C)$69,000
• D)$111,000
• E)$70,000

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Definitions:

Increasing Returns

A situation in production where the output increases by a proportion greater than the increase in inputs, often leading to economies of scale.

Input Prices

The prices of the raw materials, components, or services that are used to produce a final product or service.

Marginal Product

The additional output resulting from a one-unit increase in the quantity of a variable input, while keeping other inputs constant.

Returns to Scale

The rate at which output increases as a result of proportionately increasing all inputs in the production process.