A firm must choose from six capital budgeting proposals outlined below. The firm is subject to capital rationing and has a capital budget of $800,000; the firm's cost of capital is 16 percent.

10) Using the internal rate of return approach to ranking projects, which projects should the firm accept(in what order)?

A) 1, 2, and 5

B) 5,2 and 1

C) 1,2 and 3

D) 2,1 and 3

Project IRR NPV 1 17% 18% 2 3 Initial Investment $100,000 $410,000 $230,000 $200,000 $150,000 $400,000 $250,000 16% 4 12% $95,000 $21,000 $55,000 -$5,000 $46,000 $70,000 -$10,000 5 19% 6 15% 7 12%