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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 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 $73,600 this year. It has determined the IRR for each of the following projects:

Project Project Size Internal Rate of Return
A $10,900 14.0%
B 25,900 15.0
C 25,900 16.0
D 10,900 17.0
E 10,900 11.0
F 20,900 19.0
G 15,900 21.0

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 Aunanswered
  • Project Dchecked
  • Project Fchecked
  • Project Gchecked
  • Project Eunanswered
  • Project Cchecked

b. If projects C and G are mutually exclusive, how would that affect your overall answer? That is, which projects would you accept in spending the $73,600? (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 Bchecked
  • Project Aunanswered
  • Project Fchecked
  • Project Cunchecked
  • Project Gchecked
  • Project Eunanswered
  • Project Dchecked

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