Investment proposals A and B require initial investments of $45,000 and $35,000, respectively. Both have an economic

Question:

Investment proposals A and B require initial investments of $45,000 and $35,000, respectively. Both have an economic life of four years with no residual value. Their expected profits are as follows:

If the firm€™s cost of capital is 14%, rank the proposals based on their:
a. NPVs.
b. IRRs.
c. Payback periods.

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...