Question: Project A costs $ 1 5 , 0 0 0 and IRR of 1 7 % . Project B costs $ 1 5 , 0

Project A costs $

15, 000

and IRR of

17 % .

Project B costs $

15, 000

and IRR

16 % .

Project C costs $

12, 000

and

13 %

IRR, and project D costs $

20, 000

and

13 %

IRR? Cost of capital is

14 %

and company will adjust

3 %

up or down for high or low rosk projects. Projects A and D are average risk, project B is low risk and project C is high risk. What's the firms capital budget? What is the capital budget considering the risk factors?

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