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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 13 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 13 percent. It will invest only $79,400 this year. It has determined the IRR for each of the following projects:

Project Project Size Internal Rate of Return
A $11,100 19.0%
B 31,100 17.0
C 26,100 18.0
D 31,100 16.0
E 11,100 20.0
F 21,100 15.0
G 31,100 14.0

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

b. If projects B and E are mutually exclusive, how would that affect your overall answer? That is, which projects would you accept in spending the $79,400? (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 D
  • Project B
  • Project A
  • Project F
  • Project E
  • Project G
  • Project C

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