Use the Table for the Question(s)below

question 62

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 NPV for all the projects you invest in will be closest to:

• A)$65,000.
• B)$80,000.
• C)$69,000.
• D)$111,000.

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Definitions:

Net Income

The total profit of a company after all expenses, taxes, and costs have been subtracted from total revenue.

Stock Options

Financial derivatives that give the holder the right, but not the obligation, to buy or sell a stock at a predetermined price within a certain period.

Vesting Period

The period of time before shares are unconditionally owned by an employee in an employee stock option plan.

GAAP

General Accepted Accounting Principles, a standard framework of guidelines for financial accounting used in any jurisdiction, including the detailed standards and rules developed by the Financial Accounting Standards Board in the U.S.