Consider the three projects A, B, and C. The cost of capital is 12 percent, and the

Question:

Consider the three projects A, B, and C. The cost of capital is 12 percent, and the projects have the following expected cash flows:

a. What is the internal rate of return of the three projects?
b. What is the net present value of the three projects?
c. If the three projects are independent, which projects should be accepted?
d. If the three projects are mutually exclusive, which project should be selected?
e. If the total budget for the three projects is limited to $450,000, which projects should be selected?

Net Present Value
What is NPV? The net present value is an important tool for capital budgeting decision to assess that an investment in a project is worthwhile or not? The net present value of a project is calculated before taking up the investment decision at... Internal Rate of Return
Internal Rate of Return of IRR is a capital budgeting tool that is used to assess the viability of an investment opportunity. IRR is the true rate of return that a project is capable of generating. It is a metric that tells you about the investment... Cost Of Capital
Cost of capital refers to the opportunity cost of making a specific investment . Cost of capital (COC) is the rate of return that a firm must earn on its project investments to maintain its market value and attract funds. COC is the required rate of...