Question
Q#4 A company is trying to determine which projects to fund. Since the firm does not have the capital budget to fund all the projects,
Q#4 A company is trying to determine which projects to fund. Since the firm does not have the capital budget to fund all the projects, rank each by IRR. If the firms capital budget is $75,000, which projects will be funded? What will the firms MARR be?
NEW QUESTION: Based on the information provided in Q#4(ABOVE) (a) What would the companys budget need to be to fund all 25 projects?
(b) What projects would be funded if the company could get a return on its money of 15% through other means?
(c) What other, non-financial factors, might lead the company to decide to fund one or more of the projects with lower rates of return?
Project $0 N (years) First Cost $10,000 $20,000 $30,000 $40,000 $35,000 $25,000 $20,000 Annual Benefits Salvage Value $2,500 $3,500 $5,000 $3,600 $3,000 $4,500 $10,000 $4,000 $5,000 $5,000 $3,000 $4,200 $10,000 Project $0 N (years) First Cost $10,000 $20,000 $30,000 $40,000 $35,000 $25,000 $20,000 Annual Benefits Salvage Value $2,500 $3,500 $5,000 $3,600 $3,000 $4,500 $10,000 $4,000 $5,000 $5,000 $3,000 $4,200 $10,000Step by Step Solution
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