Question
Galaxy Satellite Co. is attempting to select the best group of independent projects competing for the firm's fixed capital budget of $10,000,000. Any unused portion
Galaxy Satellite Co. is attempting to select the best group of independent projects competing for the firm's fixed capital budget of $10,000,000. Any unused portion of this budget will earn less than its 20 percent cost of capital. A summary of key data about the proposed projects follows.
| Project | PV of Inflows | Initial Investment | IRR | |
| A | $3,050,000 | $3,000,000 |
| 21% |
| B | $9,320,000 | $9,000,000 |
| 25% |
| C | $1,060,000 | $1,000,000 |
| 24% |
| D | $7,350,000 | $7,000,000 |
| 23% |
Use the IRR approach to select the best group of projects. (Note that the discount rate or the cost of capital is 20%.)
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Compliance Audits And Plans For Healthcare
Authors: Cherilyn G. Murer, Michael A. Murer, Lyndean Lenhoff Brick, Healthcare Financial Management Association (U. S.)
1st Edition
