Consider the following investment opportunities and their associated cash flows

Assume the projects are mutually exclusive and the firm can raise any amount of capital needed at a cost of 12% per year.

Yr. 0 Yr. 1 Yr. 2 Yr. 3

(Investment)

Deal A -44,000 15,000 16,000 30,000

Deal B -30,000 7,000 7,000 30,000

Deal C -30,000 15,000 15,000 10,000

a.Find the NPV of each project. Based on your analysis, which project should be taken?

b.Find the IRR of each project. Based on this analysis, which project should be taken?

c.Which project has the shortest payback period?

d. Which project would you recommend to your client? Why?

Now assume that the projects are independent and can be carried out in parallel if desired.

e. If the firm can raise as much capital as it needs at 12% a year, which project(s) should be undertaken and why?

f. If the firm has a fixed capital budget limit of $60,000, which project(s) should it undertake and why?

(Please Note: at most one of each project is required, and projects can be scaled back proportionately.)