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You have been asked to analyze four investment projects (A, B, C, and D) your firm is considering. The initial costs (investment) of these projects,
You have been asked to analyze four investment projects (A, B, C, and D) your firm is considering. The initial costs (investment) of these projects, as well as the Net Cash Flows (NCF) received at the end of each year, are as given in the table below. Your calculations for Net Present Value (NPV) at two different discount rates (10% and 15% respectively), and Internal Rate of Return (IRR) are presented in this table. a. Consider the case where these projects are mutually exclusive, the cost of capital is 10%, and there is no constraint on the amount the firm can invest. Which, if any, of these projects would you recommend your firm select and why? b. Consider the case where these projects are mutually exclusive, the cost of capital is 15%, and there is no constraint on the amount the firm can invest. Which, if any, of these projects would you recommend your firm select and why? c. Consider the case where these projects are not mutually exclusive, the firm's cost o capital is 16%, and there is no constraint on the amount the firm can invest. Which, if any, of these projects would you recommend your firm select and why? d. Consider the case where these projects are not mutually exclusive, the cost of capital is 10%, and the amount the firm can invest is limited to $150,000. Which, if any, of these projects would you recommend your firm select and why
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