You Are in Charge of One Division of Yeti Surplus

question 24

Multiple Choice

You are in charge of one division of Yeti Surplus Inc.Your division is subject to capital rationing.Your division has 4 indivisible projects available,detailed as follows:

If you must select projects subject to a budget constraint of 5 million dollars,which set of projects should be accepted so as to maximize firm value?

• A) Projects 1, 2 and 3
• B) Project 1 only
• C) Projects 1 and 4
• D) Projects 2, 3 and 4

---

Definitions:

Liability Accounts

Financial accounting ledgers that record amounts owed to creditors or suppliers.

Debits

Accounting entries that increase asset or expense accounts, or decrease liability, equity, or revenue accounts.

Trial Balance

A bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit columns to ensure a company's bookkeeping system is mathematically correct.

Journalizing

The process of recording financial transactions in a journal or diary, marking the first step in the accounting cycle.