Problem 12-22 (Algo) Capital rationing and mutually exclusive investments [LO12-4] The Suboptimal Glass Company uses a process of capital rationing in its decision making. The firms cost of capital is 10 percent. It will only invest $57,800 this year. It has determined the internal rate of return for each of the following projects.

ProjectProject SizeInternal Rate of ReturnA$ 10,70014%B30,70013C25,70012D10,70015E10,70018F20,70019G15,70016

Pick out the projects that the firm should accept.

Note: You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.

• Project A
• Project B
• Project G
• Project E
• Project F
• Project C
• Project D

If Projects E and F are mutually exclusive, which projects would you accept in spending the $57,800?

Note: You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.

• Project f
• Project B
• Project G
• Project C
• Project D
• Project E
• Project A