The correct answer is: D. Any of the above.
A divisible project is a project that can be broken down into smaller, independent projects. This means that the NPV of a divisible project can be maximized by choosing the optimal combination of smaller projects.
The feasibility set approach is a method for selecting projects that are feasible given the project’s constraints. The internal rate of return (IRR) is a measure of a project’s profitability. The profitability index (PI) is a measure of a project’s return on investment.
All three of these methods can be used to maximize the NPV of a divisible project. However, the best method to use will depend on the specific project and the constraints that are in place.
The feasibility set approach is a good option if the project’s constraints are well-defined. The IRR is a good option if the project’s cash flows are well-defined. The PI is a good option if the project’s risk is well-defined.
In some cases, it may be necessary to use a combination of methods to maximize the NPV of a divisible project. For example, the feasibility set approach could be used to select a set of feasible projects, and then the IRR or PI could be used to select the best project from the feasible set.