Question
BLA, Inc. is considering the following projects for expansion of the business: Project Initial investment IRR Present value at 11% A $ 140,000 15% $
- BLA, Inc. is considering the following projects for expansion of the business:
| Project | Initial investment | IRR | Present value at 11% |
| A | $ 140,000 | 15% | $ 200,000 |
| B | 120,000 | 11 | 120,000 |
| C | 180,000 | 18 | 260,000 |
| D | 110,000 | 16 | 155,000 |
| E | 120,000 | 8 | 98,000 |
| F | 160,000 | 12 | 210,000 |
The capital budget available for investment in the projects is $450,000. All the projects are equally risky and the required rate for all projects is 11 percent.
Suggest BLA projects for investment based on the following methods of capital rationing:
- Internal rate of return
- Net present value
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Financial Markets And Institutions
Authors: Anthony Saunders, Marcia Millon Cornett
1st International Edition
0071181334, 9780071181334
