Calculate NPV for Projects If They Are Infinitely Divisible


Tiger plc has the following projects:

Projects Initial Investment,      £ NPV (after tax)
A 100,000                                 15,000
B 150,000                                 18,000
C 75,000                                   7,000
D 50,000                                   6,500

The company has only £250,000 available at year 0. There is no other investment opportunity for the firm with any spare cash which is not invested in the above 4 projects.

i. Assume that all projects above are infinitely divisible. Explain, with supporting calculations, which projects the company should choose to maximize its value? What is the optimal NPV of the investment plan?
ii. Would you advice to the management be different if these projects are not infinitely divisible? What would be the NPV of the revised investment plan?


The question belongs to Finance and it is about calculation of optimal NPV for the 4 of the projects, if all the projects are infinitely divisible and what would be the NPV if the projects are not infinitely divisible.

Total Word Count 125

Download Full Solution


  • HWA

    this is a very good website

  • HWA

    I have 50 questions for the same test your page is showing only 28

  • HWA

    hi can you please help or guide me to answer my assignments. thanks

  • HWA

    hi can anyone help or guide me to my assignments. thanks

  • HWA

  • HWA

    This solution is perfect ...thanks

  • HWA

    Hello Allison,I love the 2nd image that you did! I also, had never heard of SumoPaint, is something that I will have to exolpre a bit! I understand completely the 52 (or so) youtube videos that you probably watched. Sometimes they have what you want, sometimes they don't! However, it is always satisfying when you are able to produce something that you have taught yourself. Great job!Debra 0 likes

  • HWA

    Perfect bank of solution. 

  • HWA

    great !

  • HWA
    Paul Brandon-Fritzius

    thanks for the quick response. the solution looks good. :)

  • HWA
    tina Johnson

    thnx for the answer. it was perfect. just the way i wanted it. 

  • HWA

    works fine.