A company is considering the following investment opportunities (A, B, C).

Investment Initial Cost NPV @15% Expected Life IRR

A 5,500,000 340,000 10 yrs 20% 

B 3,000,000 300,000 10 yrs 30% 

C 2,000,000 200,000 10 yrs 40% 

a. If the company can raise large amounts of money at an annual cost of 15%, and if the investments are independent of one another, which should it undertake? 

b. If the company can raise large amounts of money at an annual cost of 15%, and if the investments are mutually exclusive, which should it undertake?

c. If the company has a fixed capital budget of $5.5 million, and if the investments are independent of one another, which should it undertake?