Suppose in the capital budgeting model in Figure 6.4 that each investment requires $2000 during year 2, and only $5000 is available for investment during year 2.
a. Assuming that available money uninvested at the end of year 1 cannot be used during year 2, what combination of investments maximizes NPV?
b. Suppose that any uninvested money at the end of year 1 is available for investment in year 2. Does your answer to part a change?
Already registered? Login
Not Account? Sign up
Enter your email address to reset your password
Back to Login? Click here