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 6% per year, answer the following questions: CFs of Project Period CFs of Project A, $ CFs of Project B, $ CFs of Project C, $ D, $ 0 1 -500,000 140,000 250,000 300,000 -600,000 300,000 200,000 300,000 -500,000 200,000 200,000 300,000 -400,000 100,000 300,000 100,000 2 3 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)