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The directors of AE Electronics Ltd. Are considering investing in the following short-term projects. The Cash flow (after taxes) and costs of capital associated with
The directors of AE Electronics Ltd. Are considering investing in the following short-term projects. The Cash flow (after taxes) and costs of capital associated with each of these projects are given in the table below.
| Project Name | Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | Cost of Capital |
| Alpha | -100 | 50 | 70 | 20 | 80 | 10% |
| Beta | -250 | 80 | 140 | 100 | 120 | 12% |
| Gamma | -150 | 120 | 40 | 70 | 30 | 10% |
| Delta | -250 | 80 | 80 | 80 | 80 | 14% |
| Epsilon | -50 | 40 | 40 | 20 | 20 | 11% |
Which of the five projects would be considered acceptable in the AE electronics Ltd. If the NPV technique is being used to make capital budgeting decisions?
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