An Investor Has a Budget of $10 Million

question 58

Multiple Choice

An investor has a budget of $10 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 D
• D)Project C and Project D

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Definitions:

Sample

A portion, piece, or segment taken from something larger to represent the quality, style, or nature of the whole.

Merchantability

An implied warranty that goods sold by a merchant are reasonably fit for the general purpose for which they are sold.

Fungible Goods

Items that are interchangeable with others of the same type because they are identical in essence and value, such as grains or precious metals.

Average Quality

The median standard of quality among similar products or services, considered acceptable or satisfactory.