Botany Bay inc a maker of casual clothing is considering four projects shown in the following table because of past financial difficulties the company has a high cost of capital at 16.0%. Which of thes projects would be acceptable under those cost circumstances?

a: calculate the NPV of each project using a cost of capital of 16.0%.

b: rank acceptable projects by NPV

c: calculate the IRR of each project and use it to determine the highest cost of capital at which all of the projects would be acceptable.

Table

project A project B project C project D

initial investment (CFo) 51,200 101,200 81,200 181,200

Year (t) cash inflows (CFt)

1 21,200 37,200 21,200 101,200

2 21,200 52,200 41,200 81,200

3 21,200 52,200 61,200 61,200