You have to choose between the following projects. If the cost of capital is 7%, what investment
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Question:
You have to choose between the following projects. If the cost of capital is 7%, what investment or investments should you make if you have a budget of $50 million?
Project C and Project D
Project B
Project A and D
Project A
Project | Initial Investment | Cash flow |
A | $50 million | $10 million per year for seven years |
B | $50 million | $7 million per year for twelve years |
C | $25 million | $5 million per year for seven years |
D | $25 million | $3.5 million per year for twelve years |
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