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Hi Sir,
Hope you are doing well!
Ques – This objective test case question contains question types which will only appear in a
computer-based exam, but this question provides valuable practice for all students
whichever version of the exam they are taking.
Easter Co is about to hold its annual strategic planning meeting and a number of capital
investment projects will be discussed. A summary of the projects’ cash flows is shown
below.
Project NPV Investment
$000 $000
A 4,900 3,200
B 7,400 9,300
C 5,900 7,300
D 7,500 5,200
E 9,000 5,600
The investment will need to be made at the start of the coming year; no projects can be
delayed and none are divisible. The funds available for these projects are limited to
$10,000,000.
a) What projects would be accepted if it was found that projects A and E were
mutually exclusive?
A A and D
B A and E
C A, D and E
D D and EShouldnt it be D&E since they are giving the highest NPV here?
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