Question: Mega Power would like to evaluate 5 projects A, B ,C ,D and E with the following cash flows. Project Cashflow-Year:0Year:1 Year:2 Year:3 A -150
Mega Power would like to evaluate 5 projects A, B ,C ,D and E with the following cash flows.
Project Cashflow-Year:0Year:1 Year:2 Year:3
A -150 000 80 000 60 000 70000
B -120 000 80 000 80 000 80 000
C -200 000 100 000 120 000 140 000
D -300 000 150 000 150 000150 000
E -250 000 150 000 100 000 100 000
Mega Power employs the net present value as a capital budgeting technique. The company's cost of capital is 12%. Which projects must Mega Power undertake and in which order in order for it to maximize shareholders wealth?
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