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Capital rationingNPV approach A firm with a 13.3% cost of capital must select the optimal group of projects from those shown in the following table,
Capital rationingNPV approach A firm with a 13.3% cost of capital must select the optimal group of projects from those shown in the following table, given its capital budget of $1.20 million. Project Initial investment Damonu $300,000 300,000 300,000 900,000 500,000 100,000 800,000 NPV at 13.3% cost of capital $80,000 9,000 18,000 84,000 71,000 49,000 152,000 The present value of cash inflows for project A is $ . (Round to the nearest dollar.) The present value of cash inflows for project B is $ (Round to the nearest dollar.) The present value of cash inflows for project C is $ . (Round to the nearest dollar.) The present value of cash inflows for project D is $ . (Round to the nearest dollar.) The present value of cash inflows for project E is $ . (Round to the nearest dollar.) The present value of cash inflows for project F is $ . (Round to the nearest dollar.) The present value of cash inflows for project G is $ . (Round to the nearest dollar.) b. Select the optimal group of projects, keeping in mind that unused funds are costly. (Select the best choice below.) O A. Select projects A, B and E. O B. Select projects A, C, E and F. O C. Select projects C, F and G. OD. Select projects D and C
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