Capital rationing-NPV approach A tirm with a 12.6% cost ot capital must select the optimal group ot projects trom those shown in the tollowing table, given its capital budget ot $1.10 million. NPV at 12.6% Project Initial investment cost of capital $88.000 $300,000 A 5,000 300,000 C. 100.000 17,000 D 900,000 95,000 E 500,000 72,000 F 200,000 53,000 155,000 800,000 a. Calculate the present value of cash inflows associated with each project. b. Select the optimal group of projects, keeping in mind that unused funds are costly