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(a) Let the capital budget be 5000 and the following projects are available: Which projects should be taken? (b) Consider the following projects: Project A:
(a) Let the capital budget be 5000 and the following projects are available: Which projects should be taken? (b) Consider the following projects: Project A: initial cost=100,000 and annual cash flow=24,000 for 6 years. Project B: initial cost=60,000 and annual cash flow=26,000 for 3 years. The cost of capital is 8% for both projects. What should be the decision if the two projects are (i) independent. (ii) mutually exclusive
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