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A company has the opportunity to do any, none, or all of the projects for which the net cash flows per year are shown below.
A company has the opportunity to do any, none, or all of the projects for which the net cash flows per year are shown below. The company has a cost of capital of 12%. Which should the company do and why? You must use at least two capital budgeting methods. Show your work.
Year | A | B | C |
0 | -300 | -150 | -350 |
1 | 100 | -50 | 100 |
2 | 100 | 100 | 100 |
3 | 100 | 100 | 100 |
4 | 100 | 100 | 100 |
5 | 100 | 100 | 100 |
6 | 50 | 100 | 100 |
7 | -100 | -200 | 0 |
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