Capital rationing: NPV approach A firm with a 13% cost of capital must select the optimal group of projects from those shown in the following table, given its capital budget of $1 million.

Project	Initial investment	NPV at 13% cost of capital
A	$300,000	$ 84,000
B	200,000	10,000
C	100,000	25,000
D	900,000	90,000
E	500,000	70,000
F	100,000	50,000
G	800,000	160,000

1. Calculate the present value of cash inflows associated with each project.

2. Select the optimal group of projects, keeping in mind that unused funds are