A firm must choose from six capital budgeting proposals outlined below. The firm is subject to capital rationing and has an initial budget of -$1,000,000; the firm's WACC is 15 percent.

Project	Initial Investment	IRR	NPV
1	$200,000	19%	$100,000
2	400,000	17	-20,000
3	250,000	16	60,000
4	200,000	12	-5,000
5	150,000	20	50,000
6	400,000	15	150,000

Using the net present value approach to ranking projects, which projects should the firm accept if the projects are mutually exclusive?

a.

1, 3, 5, and 6

b.

1

c.

6

d.

1, 3, 4, 5, and 6