1. a) Dove plc has the following projects in which it can invest: Project NPV...

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1. a) Dove plc has the following projects in which it can invest: Project NPV at t=0, m A B D E Cash outflow at t=0, m 2 2.5 2.5 5.1 6.9 Present value at t=0 of cash inflows, m 5.5 7.1 3.8 10 21 3.5 4.6 1.3 4.9 14.1 Dove has no other investment opportunities. Projects A and B are mutually exclusive. The capital investment budget at t=0 is limited to 12.5 million. Dove plc is committed to maximising the wealth of its shareholders. How should Dove utilise its capital investment budget if: (i) all projects are divisible (can be scaled down) (ii) all projects are indivisible

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