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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 12 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 12 percent. It will invest only $65,400 this year. It has determined the IRR for each of the following projects:

Project Project Size Internal Rate of Return
A $10,100 12.0%
B 20,100 12.5
C 25,100 13.5
D 10,100 14.0
E 10,100 22.0
F 20,100 15.0
G 10,100 10.0

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 Bunanswered
  • Project A unanswered
  • Project D unanswered
  • Project F unanswered
  • Project E unanswered
  • Project Gunanswered
  • Project Cunanswered

b. If projects E and F are mutually exclusive, how would that affect your overall answer? That is, which projects would you accept in spending the $65,400? (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 B unanswered

  • Project A unanswered
  • Project D unanswered
  • Project F unanswered
  • Project E unanswered
  • Project G unanswered
  • Project C unanswered

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