Borghia Pharmaceuticals has $1 million allocated for capital expenditures. Which of the following projects should the company accept to stay within the $1 million budget? How much does the budget limit cost the company in terms of its market value? The opportunity cost of capital for each project is 11%.
Project | Investmnt ($ thousands) | NPV ($ thousands) | IRR (%) |
1 | 300 | 66 | 17.2 |
2 | 200 | -4 | 10.7 |
3 | 250 | 43 | 16.6 |
4 | 100 | 14 | 12.1 |
5 | 100 | 7 | 11.8 |
6 | 350 | 63 | 18.0 |
7 | 400 | 48 | 13.5 |
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