A and B

Capital rationing NPV approach A firm with a 13.9% cost of capital must select the optimal group of projects from those shown in the following table, given its capital budget of $1.30 million Project A B Initial investment $400,000 200,000 100,000 900,000 500,000 300.000 700,000 NPV at 13.9% cost of capital $85.000 7.000 29,000 92,000 78,000 45,000 157,000 E a. Calculate the present value of cash flows associated with each project ys 54 The present value of cash inflows for project Alo $ (Round to the nearest dollar) 50; in ting 52 2000 Enter your answer in the answer box and then click Check Answer 100 7 Darts remaining CA B NPV at 13.9% Project Initial investment cost of capital A $400,000 $85,000 200,000 7,000 100,000 29,000 D 900,000 92,000 E 500,000 78,000 300,000 45,000 G 700,000 157,000 a. Calculate the present value of cash inflows associated with each project. b. Select the optimal group of projects, keeping in mind that unused funds are costly a. Calculate the present value of cash inflows associated with each project The present value of cash inflows for project is $(Round to the nearest dollar.) Timo