$21)$ Evaluation of capital budgeting projects $(15$ points$)$

Nest Corporation is experiencing hard capital rationing and will not be able to invest more than $$1,000,000$ this year. The firm is considering four mutually exclusive projects with the cash flows presented below. If the firm$$s cost of capital is $12\%$ per year, answer the following questions:

Period CFs of Project A$,$ $ CFs of Project B$,$ $ CFs of Project C$,$ $ CFs of Project D$,$ $

$0-500,000-600,000-500,000-400,000$

$1140,000300,000200,000100,000$

$2250,000200,000200,000300,000$

$3350,000350,000350,000150,000$

a$)$ Find each project$$s net present value and interpret the results $(4$ points$)$

b$)$ Find each project$$s profitability index and interpret the results $(4$ points$)$

c$)$ Find each project$$s internal rate of return and interpret the results $(4$ points$)$

d$)$ Given the above findings, which project$($s$)$ should the firm accept and why? $(3$ points$)$