Correct Answer: A

Why is it not Answer D that is correct? Pls show work!

: E MAD Inc. is evaluating the following four independent, investment opportunities: Project Cost IRR 1-013))0.5 F $300,000 150,000 200,000 400,000 14% V 13% 12% 11% MAD's target capital structure is 50 percent debt and 50 percent equity. The yield to maturity on the company's new debt will be 10 percent. MAD's beta is 1.7, the risk free rate is 3% and the required market return is 11%. If the company's tax rate is 30 percent, then which of the projects will be accepted? t ren 4) Projects A and B 0.5(rd) to. S(rs) B) Project A Projects A, B, C, and D rs - 0.03 + (0.11 -0.03) (1,7) - 0.166(0.5)=0.0837 (DProjects A, B, and C rd=0.161-0.3) = 0.67(0.5) = 0.035 10. Marge Simpson Inc. is considering the two capital budeting projects with the following cash flows that have a WACC of 10%. Year How 'Bout A Pretzel What a Falafel -150,000 -150,000 30,000 90,000 65,000 85,000 80,000 50,000 120,000 45,000 AWN- What is the MIRR for What a Falefel at its WACC of 10%? A) 11.7% B) 21.5% n 1) NPV 220,367.46 70