2D4C LEWIS SERVICES IS EVALUATING SIX INVESTMENT OPPORTUNITIES (PROJE...

351.

CSO: 2D4b

LOS: 2D4c

Lewis Services is evaluating six investment opportunities (projects). The following table

reflects each project’s net present value (NPV) and the respective initial investments

required. All of these projects are independent.

Project

NPV

Investment

R

$ 5,000

$10,000

S

5,000

5,000

T

8,000

40,000

U

15,000

60,000

V

15,000

75,000

W

3,000

15,000

Lewis has an investment constraint of $100,000. Which combination of projects would

represent the optimal investment that should be recommended to Lewis Services’

management?

a.

R, S, U and W.

b.

R, V and W.

c.

R, S and V.

d.

T and U.