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A company is planning for the budget in year 2021. There are four three-year projects suggested by the department. Project A requires an initial investment

A company is planning for the budget in year 2021. There are four three-year projects suggested by the department. Project A requires an initial investment of $14000 and the cash flow for the following three years are $1400, $1400, $16800 respectively. Project B requires an initial investment of $4200 and the cash flow for the following three years are $4200, $420, $420 respectively. Project C requires an initial investment of $9800 and the cash flow for the following three years are $9800, $980, $980 respectively. Project D requires an initial investment of $2800 and the cash flow for the following three years are $1400, $700, $700 respectively. The CEO ask you to pick up the projects within a budget constraint of $16800 and asks you to choose the projects. What is your choice?

a

If the company's cost of capital is 14.1%, choose project A and D

b

If the company's cost of capital is 13.4%, choose project A and D

c

If the company's cost of capital is 12.18%, choose project B and C

d

If the company's cost of capital is 8.81%, choose project B and C

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