Problem $22-12$

A firm has the following investment alternatives. Each one lasts a year.

$\backslash$table$[[,,,],[$Investment$,$A$,$B$,$C$],[$Cash inflow,$$1,243,555,595],[$Cash outflow,$$1,100,500,500]]$

The firm's cost of capital is $6$ percent. A and $B$ are mutually exclusive, and $B$ and $C$ are mutually exclusive.

a$.$ What is the NPV of investment A$?$ Investment B$?$ Investment C$?$ Use Appendix B to answer the questions. Use a minus sign to enter negative values, if any. Round your answers to the nearest cent.

A: $

B: $

$c$:$

b$.$ What is the internal rate on investment A$?$ Investment B$?$ Investment C$?$ Round your answers to the nearest whole number.

A: $\%$

B: $\%$

C: $\%$

c$.$ Which investment$($s$)$ should the firm make?

The firm should make investment$($s$)-$Select$-v.$

d$.$ If the firm had unlimited sources of funds, which investment$($s$)$ should it make?

The firm should make investment$($s$)-$Select$-V.$

e$.$ If there were another alternative, investment $D,$ with an IRR of $5$ percent, which investment$($s$)$ should the firm make?

The firm should make investment$($s$)$

f$.$ If the firm's cost of capital rose to $14$ percent, what effect would that have on investment A$\text{'}$s IRR? Round your answer to the nearest whole number.

If the cost of capital rises to $14$ percent, the IRR of investment A $-$Select$-V\%.$