1. Which project(s) should Capital Invest Inc. undertake during the upcoming year if it has only $300,000 of capital funds available? 1. Project 1 2. 3. 4. Projects 2, 3, and 4 Projects 3 and 4 Project 3 2. Which project(s) should Capital Invest Inc. undertake during the upcoming year if the company has $ 800,000 of capital funds available, and uses the Net Present Value Model? 1. Project 1 2. 3. 4. Projects 2, 3, and 4 Projects 3 and 4 Project 3
1. Which project(s) should Capital Invest Inc. undertake during the upcoming year if it has only $300,000 of capital funds available? 1. Project 1 2. 3. 4. Projects 2, 3, and 4 Projects 3 and 4 Project 3 2. Which project(s) should Capital Invest Inc. undertake during the upcoming year if the company has $ 800,000 of capital funds available, and uses the Net Present Value Model? 1. Project 1 2. 3. 4. Projects 2, 3, and 4 Projects 3 and 4 Project 3
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Required Question .1 please without plagiarism
Transcribed Image Text:Capital Inc. uses a 12% hurdle rate for all capital expenditures and has done the following analysis:
Project 2
Project 3
Project 4
Initial Capital outlay
$298,000
$248,000
$272,000
Annual net cash inflows
Year 1
Year 2
Year 3
Year 4
Net persent value
Profitability Index
Internal rate of return
1.
2.
3.
4.
Project 1
Projects 2, 3, and 4
Projects 3 and 4
Project 3
Project 1
$200,000
$65,000
$70,000
$80,000
1. Project 1
2.
Projects 2, 3, and 4
3. Projects 3 and 4
4.
Project 3
$40,000
($3,798)
98.00%
11.00%
$100,000
$135,000
$90,000
$65,000
$4,276
101.00%
13.00%
$80,000
$95,000
$90,000
$80,000
$14,064
106.00%
14.00%
1. Which project(s) should Capital Invest Inc. undertake during the upcoming year if it has only
$300,000 of capital funds available?
$95,000
$125,000
$90,000
$60,000
$14,662
105.00%
15.00%
2. Which project(s) should Capital Invest Inc. undertake during the upcoming year if the company has $
800,000 of capital funds available, and uses the Net Present Value Model?
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