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The Suboptimal Glass Company uses a process of capital rationing in its decision making. The firm's cost of capital is 11 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 11 percent. It will invest only $65,800 this year. It has determined the IRR for each of the following projects:

Project Project Size Internal Rate of Return
A $10,200 14.0%
B 30,200 15.0
C 25,200 19.0
D 10,200 23.5
E 10,200 20.0
F 20,200 22.0
G 25,200 18.0

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.)

check all that apply 1

  • Project Gunanswered
  • Project Bunanswered
  • Project Eunanswered
  • Project Funanswered
  • Project Dunanswered
  • Project Aunanswered
  • Project Cunanswered

b. If projects C and D are mutually exclusive, how would that affect your overall answer? That is, which projects would you accept in spending the $65,800? (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.)

check all that apply 2

  • Project Gunanswered
  • Project Aunanswered
  • Project Funanswered
  • Project Bunanswered
  • Project Dunanswered
  • Project Cunanswered
  • Project E

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