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15-17: A factory has a capital budget of $220,000 and opportunity to do the projects described in the table below: Project First Cost Annual Benefit
15-17: A factory has a capital budget of $220,000 and opportunity to do the projects described in the table below:
Project First Cost Annual Benefit Life (years) Salvage Value IRR
A $50,000 $12,000 4 $10,000
B $30,000 $10,000 3 $5,000
C $70,000 $15,000 6 $9,000
D $60,000 $30,000 2 $15,000
E $80,000 $13,000 7 $20,000
a)Complete the above table and determine which ones (if any) of the above projects should be funded.
Answer
b) What is the opportunity cost of capital?
Answer:<
Reasoning:
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