You are a senior manager at Poeing Aircrafts and have been authorized to spend up to $300,000

Question:

You are a senior manager at Poeing Aircrafts and have been authorized to spend up to $300,000 for projects. The three projects that you are considering have the following characteristics:
Project A: Initial investment of $400,000. Cash flow of $175,000 at year 1 and $280,000 at year 2.
This is a plant expansion project, where the required rate of return is 10 percent.
Project B: Initial investment of $200,000. Cash flow of $195,000 at year 1 and $105,000 at year 2.
This is a new product development project, where the required rate of return is 20 percent.
Project C : Initial investment of $150,000. Cash flow of $160,000 at year 1 and $50,000 at year 2.
This is a market expansion project, where the required rate of return is 20 percent.
Assume the corporate is 10 percent.
Please offer your recommendations, backed by your analysis.

Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal...