Problem $22-12$

A firm has the following investment alternatives. Each one lasts a year.

Investment A B C

Cash inflow $ $1,243660708$

Cash outflow $ $1,100600600$

The firm$$s cost of capital is $7$ percent. A and B are mutually exclusive, and B and C are mutually exclusive.

What is the net present value of investment A$?$ Investment B$?$ Investment C$?$ Use Appendix B to answer the questions. Use a minus sign to enter negative values, if any. Round your answers to the nearest cent.

A: $

B: $

C: $

What is the internal rate on investment A$?$ Investment B$?$ Investment C$?$ Round your answers to the nearest whole number.

A:

$\%$

B:

$\%$

C:

$\%$

Which investment$($s$)$ should the firm make?

The firm should make investment$($s$)$

A and C

$.$

If the firm had unlimited sources of funds, which investment$($s$)$ should it make?

The firm should make investment$($s$)$

A and C

$.$

If there were another alternative, investment D$,$ with an internal rate of return of $6$ percent, which investment$($s$)$ should the firm make?

The firm should make investment$($s$)$

A and C

$.$

If the firm$$s cost of capital rose to $12$ percent, what effect would that have on investment A$$s internal rate of return? Round your answer to the nearest whole number.

If the cost of capital rises to $12$ percent, the internal rate of return of investment A

will remain

$\%.$