A company with a cost of capital of 10 percent has non-postponable investment opportunities with the...

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A company with a cost of capital of 10 percent has non-postponable investment opportunities with the estimated cash flows shown below (figures in Tshs million). Year 0 1 ܂ ܡ ܩ ܫ ܗ ܗ 7 8 Project A (1,000) 3,000 Project B (800) 200 300 400 400 300 200 (100) Project C Project D Project E (750) (500) (800) 300 150 300 150 300 150 300 150 300 150 150 150 350 350 350 350 350 350 Decide which projects should be accepted in the following circumstances: a) the company is not in a capital rationing situation; b) the company is in a capital rationing position, the projects are divisible, and only Tshs 2,500 million is available; c) the company is in a capital rationing position, the projects are not divisible, and only Tshs 2,500 million is available. A company with a cost of capital of 10 percent has non-postponable investment opportunities with the estimated cash flows shown below (figures in Tshs million). Year 0 1 ܂ ܡ ܩ ܫ ܗ ܗ 7 8 Project A (1,000) 3,000 Project B (800) 200 300 400 400 300 200 (100) Project C Project D Project E (750) (500) (800) 300 150 300 150 300 150 300 150 300 150 150 150 350 350 350 350 350 350 Decide which projects should be accepted in the following circumstances: a) the company is not in a capital rationing situation; b) the company is in a capital rationing position, the projects are divisible, and only Tshs 2,500 million is available; c) the company is in a capital rationing position, the projects are not divisible, and only Tshs 2,500 million is available.

Answer rating: 100% (QA)

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