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Abu Luqman must determine what investment opportunities to undertake for his business Al-Afdhal Corporation. He is limited to a maximum expenditure of SR17, 500 only for this capital budgeting period. The available projects with their respective IRR, NPV and Pl for Al-Afdhal Corporation are listed below: ACCORDING TO IRR CRITERIA, which projects would be selected base on the capital rationing constraint above? CALCULATETHE TOTAL NPV VALUE for the selected projects according to this ranking. ACCORDING TO PROFITABILITY INDEX (PI) CRITERIA, which projects would be selected base on the capital rationing constraint above? CALCULATE THE TOTAL NPV VALUE for the selected projects according to this ranking. From you calculation in A and B, Which set of projects would you choose under this capital constraint and explain why

 

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