NPV, with rankingsBotany Bay, Inc., a maker of casual clothing, is considering four projects shown in the following table,

Project A Project B Project C Project D

$50,900 $100,000 $79,300 $181,000

(Year) Initial investment (CF 0CF0) (t) Cash inflows

1 $20,100 $36,900 $19,400 $101,000

2 $20,100 $51,100 $40,800 $79,400

3 $20,100 $50,700 $59,800 $60,700

Because of past financial difficulties, the company has a high cost of capital at 14.5%.

a.Calculate the NPV of each project, using a cost of capital of 14.5%.

b.Rank acceptable projects by NPV.

c.Calculate the IRR of each project and use it to determine the highest cost of capital at which all of the projects would be acceptable.