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You are a project manager for your company and you are faced with six potential projects that you can invest in. Free cash flow projections

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You are a project manager for your company and you are faced with six potential projects that you can invest in. Free cash flow projections and additional relevant data are given for each project in the table below. Assume that there are no cash flows after year 3. Assume that you can only take each project once and that you can only choose one project. Which project would you invest in? Select the best answer. Interest Rate (EAR) IRR Payback Period Project Project A Project B Project C Project D Project E Project F FCF Forecasts by Year (in $1,000) 0 1 2 3 (350) 80 120 200 (420) 430 50 0 (480) (20) 270 420 (500) 220 230 280 (400) (50) 150 480 (200) 260 0 0 8% 8% 8% 15% 15% 15% 6.0% 12.9% 13.4% 20.6% 13.6% 30.0% 3 Years 1 Year 3 Years 3 Years 3 Years 1 Year OI. Project A II. Project B III. Project C O IV. Project D O V. Project E O VI. Project F

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