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A. If the company can raise large amounts of money at the annual cost of 15% and if the investment and independent of one another,

A. If the company can raise large amounts of money at the annual cost of 15% and if the investment and independent of one another, which should it undertake?

B. Considering only these three investments if the company has a fixed capital budget of $5.5 million and if the investment are independent of one another which should it undertake? Analyze each company and their investment opportunities and recommend.

0.) This problem tests your understanding of the chapter appendix. A company is considering the following investment opportunities
Investment A B C
Initial Cost ($ millions) 5.5 3 2
Expected life 10 yrs 10 yrs 10 yrs
NPV @ 15% $340,000 $300,000 $200,000
IRR 40% 30% 20%

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