PLEASE SHOW WORK

1. MAD Inc. is evaluating the following four independent, investment opportunities:

Project Cost A $300,000 B 150,000 C 200,000 D 400,000

IRR 14%

10%

13%

11%

MADs target capital structure is 60 percent debt and 40 percent equity. The yield to maturity on the companys new debt will be 10 percent. MADs beta is 1.7, the risk free rate is 4% and the required market return is 12%. If the companys tax rate is 30 percent, then which of the projects will be accepted?

A) Projects A, B, C, and D

B) Projects A, C, and D

C) Project A

D) Projects A and C