Question
The Suboptimal Glass Company uses a process of capital rationing in its decision making. The firm's cost of capital is 14 percent. It will invest
The Suboptimal Glass Company uses a process of capital rationing in its decision making. The firm's cost of capital is 14 percent. It will invest only $67,800 this year. It has determined the IRR for each of the following projects: Project Project Size Internal Rate of Return A $10,700 17.0% B 30,700 22.0 C 25,700 15.0 D 10,700 24.5 E 10,700 18.0 F 20,700 10.0 G 15,700 20.0 a. Pick out the projects that the firm should accept. (You may select more than one answer. Click the box with a check mark for the correct answer and click to empty the box for the wrong answer.) Project A Project C Project G Project B Project D Project F Project E b. If projects D and E are mutually exclusive, how would that affect your overall answer? That is, which projects would you accept in spending the $67,800? (You may select more than one answer. Click the box with a check mark for the correct answer and click to empty the box for the wrong answer.) Project A Project C Project B Project E Project D Project F Project G
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