Evaluation of Capital Budgeting Projects

21) Evaluation of capital budgeting projects (15 points) ZBest Corporation is experiencing hard capital rationing and will not be able to invest more than $1,000,000 this year. The firm is considering four mutually exclusive projects with the cash flows presented below. If the firm's cost of capital is 9.5% per year, answer the following questions: Period 0 1 2 3 CFs of Project A, $ -300,000 130,000 130,000 130,000 CFs of Project B. $ -500,000 320,000 200,000 180,000 CFs of Project C. $ -200,000 90,000 90,000 90,000 CFs of Project D, $ -500,000 100,000 220,000 350,000 I a) Find each project's net present value and interpret the results (4 points) 1 b) Find each project's profitability index and interpret the results (4 points) I c) Find each project's internal rate of return and interpret the results (4 points) d) Given the above findings, which project(s) should the firm accept and why? (3 points)