An Investor Has a Budget of $5 Million

question 3

Multiple Choice

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

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Definitions:

Analog TVs

Television systems that use analog signals to transmit video and audio as opposed to digital formats; now largely obsolete with the advent of digital broadcasting.

Product Life Cycle

The progression of a product through stages from introduction to growth, maturity, and decline.

Maturity Stage

This term refers to a phase in the product lifecycle where sales growth slows down, and the product has been accepted in the market, typically leading to increased competition.

Industry Profits

The total earnings generated by companies within a specific sector after accounting for expenses, taxes, and other charges.