Loss to the firm from the capital rationing constraint

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A firm has set a budget constraint of $200,000 on new investments, which cannot be exceeded. Given the following independent investments, what is the loss to the firm from the capital rationing constraint?

Alpha:

CF: $80 000

PI: 1.20

Delta:

CF: $120 000

PI: 1.13

Gamma:

CF: $140 000

PI: 1.10

Alpha:

CF: $85 000

PI: 1.15

a) $15,738

b) $17,762

c) $20,500

d) $31,500

Reference no: EM132013262

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