A company with a cost of capital of 10 percent has non-postponable investment opportunities with the estimated cash flows shown below (figures in Tshs million).

Year Project A Project B Project C Project D Project E

0 (1,000) (800) (750) (500) (800)

1

200 300 150

2

300 300 150 350

3

400 300 150 350

4

400 300 150 350

5

300 300 150 350

6

200

150 350

7

(100)

150 350

8 3,000

Decide which projects should be accepted in the following circumstances: the company is not in a capital rationing situation; the company is in a capital rationing position, the projects are divisible, and only Tshs 2,500 million is available; the company is in a capital rationing position, the projects are not divisible, and only Tshs 2,500 million is available.

solution on the given data above

3. A company with a cost of capital of 10 percent has non-postponable investment opportunities with the estimated cash flows shown below (figures in Tshs million). Decide which projects should be accepted in the following circumstances: a) the company is not in a capital rationing situation; b) the company is in a capital rationing position, the projects are divisible, and only Tshs 2,500 million is available; c) the company is in a capital rationing position, the projects are not divisible, and only Tshs 2,500 million is available