Oliver Stone and Rock Company use Capital Rationing in its decision making. The firm's cost of...
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Oliver Stone and Rock Company use Capital Rationing in its decision making. The firm's cost of capital is 12%. It will invest only $80,000 this year. It has determined the internal rate of return for each of the following projects: Project A B C D E F G H Project Size $15,000 25,000 30,000 25,000 20,000 15,000 25,000 10,000 Internal Rate of Return. 14% 19 10 16.5 21 11 18 17.5 A) Select the projects that the firm sho accept. B) If projects B and G are mutually exclusive, how would that affect your overall answer? Oliver Stone and Rock Company use Capital Rationing in its decision making. The firm's cost of capital is 12%. It will invest only $80,000 this year. It has determined the internal rate of return for each of the following projects: Project A B C D E F G H Project Size $15,000 25,000 30,000 25,000 20,000 15,000 25,000 10,000 Internal Rate of Return. 14% 19 10 16.5 21 11 18 17.5 A) Select the projects that the firm sho accept. B) If projects B and G are mutually exclusive, how would that affect your overall answer?
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Related Book For
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
Posted Date:
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