In the capital budgeting example from Chapter 6 (see Example 6.1), we maximized NPV for a given budget. Now find a trade-off curve for NPV versus budget. Specifically, minimize the amount invested,...

In the capital budgeting example from Chapter 6 (see Example 6.1), we maximized NPV for a given budget. Now find a trade-off curve for NPV versus budget. Specifically, minimize the amount invested, with a lower bound constraint on the NPV obtained. What lower bounds should you use? Do you get the same trade-off curve as in Figure 6.4?

Example 6.1