Consider the following investment projects and their interdependencies:
• Projects A and F are mutually exclusive.
• Projects C and D are independent projects.
• Project B is contingent on Project C.
• Project E is contingent on project F.
The following indicates the cost of capital as a function of budget:

(a) Formulate the entire list of mutually exclusive decision alternatives.
(b) What is the optimal capital budget? What is the appropriate MARR for capital budgeting purpose’?

(c) If the firm has a budget limit placed at $800. which projects would be funded? What is the appropriate MARR?

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TABLE P15.15 Project A B с D E F 0 -$100 -$200 - $100 -$300 -$200 -$150 1 40 150 30 200 100 50 Cash Flows 2 60 100 80 120 100 70 3 40 30 60 150 150 80 IRR 18.82% 24.73% 28.54% 28.25% 31.44% 14.63%