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DEF Enterprises has $800,000 for capital expenditures and is evaluating six projects. The company's required rate of return is 9%. Project Alpha: Investment: $200,000, NPV:

DEF Enterprises has $800,000 for capital expenditures and is evaluating six projects. The company's required rate of return is 9%.

  • Project Alpha: Investment: $200,000, NPV: $30,000, IRR: 11%
  • Project Beta: Investment: $250,000, NPV: -$10,000, IRR: 7%
  • Project Gamma: Investment: $150,000, NPV: $20,000, IRR: 10%
  • Project Delta: Investment: $300,000, NPV: $40,000, IRR: 12%
  • Project Epsilon: Investment: $100,000, NPV: $15,000, IRR: 9.5%
  • Project Zeta: Investment: $200,000, NPV: $25,000, IRR: 10.8%

Requirements:

  1. Determine which projects to undertake without exceeding the budget.
  2. Compute the aggregate NPV of the chosen projects.
  3. Evaluate the opportunity cost in terms of market value.

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