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A firm has the following investment alternatives. Each one lasts a year. Investment A B C Cash inflow $ 1 , 2 6 5 6
A firm has the following investment alternatives. Each one lasts a year.
Investment A B C
Cash inflow $
Cash outflow $
The firms cost of capital is percent. A and B are mutually exclusive, and B and C are mutually exclusive.
What is the net present value of investment A Investment B Investment C Use Appendix B to answer the questions. Use a minus sign to enter negative values, if any. Round your answers to the nearest cent.
A: $
B: $
C: $
What is the internal rate on investment A Investment B Investment C Round your answers to the nearest whole number.
A:
B:
C:
Which investments should the firm make?
The firm should make investments
A and C
If the firm had unlimited sources of funds, which investments should it make?
The firm should make investments
A and C
If there were another alternative, investment D with an internal rate of return of percent, which investments should the firm make?
The firm should make investments
A and C
If the firms cost of capital rose to percent, what effect would that have on investment As internal rate of return? Round your answer to the nearest whole number.
If the cost of capital rises to percent, the internal rate of return of investment A
will remain
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