Question
Given the capital budgeting analysis data, answer the given questions. 1) What is the IRR of Project A? ____________________ 2) What is the IRR of
Given the capital budgeting analysis data, answer the given questions.
1) What is the IRR of Project A? ____________________
2) What is the IRR of Project B? ____________________
3) What is the IRR of Project C? ____________________
4) What is the IRR of Project D? ____________________
5) What is the IRR of Project E? ____________________
6) What is the IRR of Project F? ____________________
7) If we could choose one or more from the six projects and we had a capital constraint of $450,000, which one(s) should we choose if the following project dependencies existed (if B then D, if C then E)? Why? Is there any unallocated capital? If so, what should we do with it?
8) If we could choose one or more from the six projects and we had a capital constraint of $550,000, which one(s) should we choose if the following project dependencies existed (if B then D, if C then E)? Why? Is there any unallocated capital? If so, what should we do with it?
Data: Net Investment Salvage Value Useful Life (Years) Project A Project B Project C Project D Project E Project $405,000 $185,000 $50,000 $75,000 $115,000 $295,000 40,000 $25,000 $7,000 $20,000 $22,000 $25,000 Year 3 Year 4 Year Project A Operating Expense Project B Operating Expense $345,000 $345,000 $345,000 $340,000 $340,000 $200,000 $200,000 $200,000 $210,000 $205,000 $285,000 $285,000 $280,000 $280,000 $285,000 $200,000 $200,000 $205,000 $205,000 $200,000 $100,000 $100,000 $100,000 $100,000 $100,000 $75,000 $75,000 $75,000 $80,000 $80,000 Operating Expense Project D Operating Expense Project E Operating Expense Project F Operating Expense $95,000 $95,000 $100,000 $125,000 $120,000 75,000 $75,000 $85,000 $95,000 $85,000 $145,000 $150,000 $150,000 $150,000$160,000 $85,000 $95,000 $95,000 $95,000 $100,000 $240,000 $225,000 215,000 $200,000 $200,000 $105,000 $100,000 $100,000 S100.000 $100,000 Use SL Depreciation Tax Rate: 35% Discount Rate: 896Step by Step Solution
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