Each of the following 10 independent projects has a 10-year life and no salvage value. The projects have been proposed by the staff of the Ace Card Company. The MARR of Ace has been 12% for several years.

(a) If there is ample money available, what projects should Ace approve? (all but four)

(b) Rank-order all the acceptable projects according to desirability using NPW/cost.

(c) If only $45,000 is available, which projects should be approved? (do 5, 9, 10, 2 and 1)

(d) Are the results the same if the projects are ranked on IRR? What is the opportunity cost of capital? (Opportunity cost = 14%)

Project Cost Uniform Annual thousands) Benefits (thousands) $5 $1.03 15 3.22 10 1.77 30 4.88 1.19 3.83 20 1.00 3.69 20 1.15 10 10 2.23 Rate of Return 16% 17 12 10 20 14 15 13 19 18