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I. Oliver Stone uses a process of capital rationing in its decision making. The WACC is 12%. It will invest only $80,000 this year. It
I. Oliver Stone uses a process of capital rationing in its decision making. The WACC is 12%. It will invest only $80,000 this year. It has determined the Internal rate of return for each of the following projects: Percent of Internal Rate of Return Project Project Size 14% 19 10 16.5 21 25,000 25,000 20,000 25,000 18 17.5 a. Pick out the projects that the firm should accept. b. If projects B and G are mutually exclusive, how would that affect your overall answer? That is, which projects would you accept in spending the 80,000
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