(CVA) Freddie Company has $5 million to invest this year. Three projects are available and all are divisible; that is, part of a project may be accepted and the cash flow returns will be pro rata. Details of the projects are as follows:
|
Project |
1 |
2 |
3 |
|
Cash outlay ($M) |
3.0 |
2.0 |
1.5 |
|
NPV($M) |
1.7 |
1.1 |
1.0 |
What is the ranking of the projects that should be accepted? Use CVA to help rank the projects.