Question
The Suboptimal Glass Company uses a process of capital rationing in its decision making. The firm's cost of capital is 10 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 10 percent. It will invest only $81,000 this year. It has determined the IRR for each of the following projects: Project Project Size Internal Rate of Return A $11,500 15.0% B 31,500 12.0 C 26,500 10.5 D 11,500 17.0 E 31,500 23.0 F 21,500 18.0 G 16,500 16.0 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 B Project D Project F Project E Project C Project G b. If projects D and F are mutually exclusive, how would that affect your overall answer? That is, which projects would you accept in spending the $81,000? (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 B Project F Project C Project E Project D Project G
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