Project IRR Cost NPV at 9%

A 18% $4,000,000 1,000,000

B 16% $1,000,000 200,000

C 14% $5,000,000 900,000

D 12% $2,000,000 400,000

E 10% $3,000,000 100,000

15. Which set of projects would maximize shareholder wealth if they have a capital budget of $7,000,000?

a. A and C.

b. A and E.

c. A, B, and D.

d. B and D.

16. Suppose it can raise the following amounts at different costs of capital. Which set of projects would maximize shareholder wealth?

WACC Amount Raised

9% $10,000,000

11% $12,000,000

13% $15,000,000

a. A and B.

b. A, B, and C.

c. A, B, and D.

d. A, B, C, and D.