Question
A firm with a 13.7% cost of capital must select the optimal group of projects from those shown in the following table, given its capital
A firm with a 13.7% cost of capital must select the optimal group of projects from those shown in the following table, given its capital budget of $1.00 million.
What is the present value of cash inflows for project A?
What is the present value of cash inflows for project B?
What is the present value of cash inflows for project C?
What is the present value of cash inflows for project D?
What is the present value of cash inflows for project E?
What is the present value of cash inflows for project F?
What is the present value of cash inflows for project G?
Which of the following options consists of the optimal group of projects (keeping in mind that unused funds are costly)?
Project A B Initial investment $200,000 400,000 200,000 900,000 400,000 100,000 700,000 NPV at 13.7% cost of capital $82,000 14,000 20,000 81,000 71,000 50,000 155,000 E F GStep by Step Solution
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