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Aco OOO 1 oc OC per DOO OOOOOOOO opportunities: 7. The Dammon Corp. has the following investment opportunities: Machine A Machine B Machine C ($15.000)
Aco OOO 1 oc OC per DOO OOOOOOOO opportunities: 7. The Dammon Corp. has the following investment opportunities: Machine A Machine B Machine C ($15.000) ($22.500) ($37.500) Intlows Inflows Inflows S12.000 9,000 Year 10,500 30.000 10.500 year 3 00000000000 m $6.000 S-O- 30,000 12.000 year 2 3,000 15.000 15.000 Under the payback period and assuming these machines are mutually exclusive, which machine(s) would Dammon Corp. choose? A. machine A B. machine B C. machine C D. machine A and B 8. Assuming that a firm has no capital rationing constraint and that a firm's investment alternatives are not mutually exclusive, the firm should accept all investment proposals A. for which it can obtain financing. B. that have a positive net present value. C. that have positive cash flows. D. that provide returns greater than the after tax cost of debt. 9. Suppose that interest rates (and, therefore, the firm's Weighted Average Cost of Capital) increase. This WOULD NOT CHANGE the capital budgeting choices a firm would make if it A. uses payback period analysis. B. uses net present value analysis
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