Projects 2, 3 and 4 require more capital than the $600,000 that is available.
This is not the combination of projects that will result in the greatest maximization of shareholder wealth.
No project with a negative NPV should be accepted, and Project 1 has a negative NPV.
When capital is limited, the decision as to which project should receive money first is made using the Profitability Indices of the different proposed projects. (Note that this is not an absolute rule, and there are some exceptions. However, this is not one of the exceptions.) Project 3 and Project 4 will use $520,000 of capital, which is within the $600,000 maximum. Their Profitability Indices are the highest, at 106% and 105%, respectively. In addition, their NPVs and IRRs are the highest.
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Which project(s) should Capital Invest Inc. undertake during the upcoming year if it has only $600,000 of funds available?