Economics · Capital Budgeting
When non-divisible projects face single-period capital rationing, the optimal investment strategy is to:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Calculate IRR and select projects with the highest Internal Rate of Return
- 2Select projects in decreasing order of Profitability Index until budget is exhausted
- 3Group combination of projects within available funds and select the combination with the highest total NPV✓
- 4Choose all projects with a positive NPV
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Group combination of projects within available funds and select the combination with the highest total NPV
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