Mace Ltd is planning its capital budget for 19_7 and 19_8. The company’s directors have reduced their initial list of projects to five, the expected cash flows of which are set out below: Project 19_7 19_8 19_9 19_0 NPV 1 60,000 30,000 25,000 25,000 1,600 2 30,000 20,000 25,000 45,000 1,300 3 40,000 50,000 60,000 70,000 8,300 4 0 80,000 45,000 55,000 900 5 50,000 10,000 30,000 40,000 7,900 None of the five projects can be delayed and all are divisible. Cash flows arise on the first day of the year. The minimum return required by shareholders of Mace Ltd is 10 per cent p.a. Which projects should Mace Ltd accept if the capital available for investment is limited to £100,000 on 1 January 19_7, but readily available at 10 per cent p.a. on 1 January 19_8 and subsequently?

Mace Ltd is planning its capital budget for 19_7 and 19_8. The company’s directors have reduced their initial list of projects to five, the expected cash flows of which are set out below: Project 19_7...

Mace Ltd is planning its capital budget for 19_7 and 19_8. The company’s directors have reduced their initial list of projects to five, the expected cash flows of which are set out below:

^Project	^19_7	^19_8	^19_9	^19_0	^NPV
1	60,000	30,000	25,000	25,000	1,600
²	^30,000	^20,000	^25,000	^45,000	^1,300
³	^40,000	^50,000	^60,000	^70,000	^8,300
⁴	⁰	^80,000	^45,000	^55,000	⁹⁰⁰
⁵	^50,000	^10,000	^30,000	^40,000	^7,900

None of the five projects can be delayed and all are divisible. Cash flows arise on the first day of the year. The minimum return required by shareholders of Mace Ltd is 10 per cent p.a. Which projects should Mace Ltd accept if the capital available for investment is limited to £100,000 on 1 January 19_7, but readily available at

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^January

^19_8

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May 26, 2022

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Mace Ltd is planning its capital budget for 19_7 and 19_8. The company’s directors have reduced their initial list of projects to five, the expected cash flows of which are set out below: Project 19_7...

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