Question

You have a $10 million capital budget and must make the decision about which investments your firm should accept for the coming year. Use the following information on three mutually exclusive projects to determine which investment your firm should accept. The firm’s cost of capital is 12%.
a. Which project do you accept on the basis of NPV?
b. Which project do you accept on the basis of PI?
c. If these are the only investments available, which one do you select?


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  • CreatedMarch 26, 2015
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