Question
(please type the answers)(mba Capital Budgeting Techniques) Homework 1: Capital Budgeting Techniques Consider these three independent projects: Year FF GG HH 0 -$100,000 -$200,000 -$300,000
(please type the answers)(mba Capital Budgeting Techniques)
Homework 1: Capital Budgeting Techniques
- Consider these three independent projects:
| Year | FF | GG | HH |
| 0 | -$100,000 | -$200,000 | -$300,000 |
| 1 | $30,000 | $40,000 | $40,000 |
| 2 | $30,000 | $40,000 | $40,000 |
| 3 | $30,000 | $40,000 | $40,000 |
| 4 | $40,000 | $120,000 | $240,000 |
| Cost of capital | 5% | 6% | 7% |
- Calculate the evaluation results based on all capital budgeting techniques we learned for all these three projects, including payback, discounted payback, NPV, PI, IRR, and MIRR. Assume 15% reinvestment rate.
- If there is no limit on the capital budget, which project(s) would you choose? Why?
- If there is a limit on the capital budget of $300,000, which project(s) would you choose? Why?
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