Question 16 (2 points) A company is planning for the budget in year 2021. There are...

Transcribed Image Text:

Question 16 (2 points) A company is planning for the budget in year 2021. There are four three-year projects suggested by the department. Project A requires an initial investment of $9000 and the cash flow for the following three years are $900, $900, $10800 respectively. Project B requires an initial investment of $2700 and the cash flow for the following three years are $2700, $270, $270 respectively. Project C requires an initial investment of $6300 and the cash flow for the following three years are $6300, $630, $630 respectively. Project D requires an initial investment of $1800 and the cash flow for the following three years are $900, $450, $450 respectively. The CEO ask you to pick up the projects within a budget constraint of $10800 and asks you to choose the projects. What's your choice? If the company's cost of capital is 15.04%, choose project A and D If the company's cost of capital is 15.50%, choose project A and D If the company's cost of capital is 10.11%, choose project B and C If the company's cost of capital is 12.51%, choose project B and C Question 16 (2 points) A company is planning for the budget in year 2021. There are four three-year projects suggested by the department. Project A requires an initial investment of $9000 and the cash flow for the following three years are $900, $900, $10800 respectively. Project B requires an initial investment of $2700 and the cash flow for the following three years are $2700, $270, $270 respectively. Project C requires an initial investment of $6300 and the cash flow for the following three years are $6300, $630, $630 respectively. Project D requires an initial investment of $1800 and the cash flow for the following three years are $900, $450, $450 respectively. The CEO ask you to pick up the projects within a budget constraint of $10800 and asks you to choose the projects. What's your choice? If the company's cost of capital is 15.04%, choose project A and D If the company's cost of capital is 15.50%, choose project A and D If the company's cost of capital is 10.11%, choose project B and C If the company's cost of capital is 12.51%, choose project B and C

Answer rating: 100% (QA)

To determine the best projects to choose within the given budget constraint of 10800 and the differe... View the full answer