Use the Table for the Question(s)below

question 46

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 $500,000 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)$111,000.
• B)$69,000.
• C)$80,000.
• D)$58,000.

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Definitions:

ROE

Return on Equity; a measure of financial performance calculated by dividing net income by shareholders' equity.

EPS

Earnings Per Share; an indicator of a company's profitability, calculated as the company's net income divided by the number of its outstanding shares.

Capital Restructuring

Changing a firm’s capital structure intentionally by buying and selling stocks and bonds simultaneously.

Leverage

Leveraging borrowed money to enhance the expected gains from an investment.