Assume that the manager faces a capital budget constraint with respect to total dollars available today to invest in new projects, $46 million. Assume same WACC for each project. All else equal, which project or set of otherwise independent projects should the manager choose? Project NPV (in $millions) IRR Required Investment today A $ 10 14.0% $ 22 B $ 9 12.9% $ 23 C $ 11 14.1% $ 23

Assume that the manager faces a capital budget constraint with respect to total dollars available today to invest in new projects, $46 million. Assume same WACC for each project. All else equal, which project or set of otherwise independent projects should the manager choose? Project NPV (in $millions) IRR Required Investment today A $ 10 14.0% $ 22 B $ 9 12.9% $ 23 C $ 11 14.1% $ 23

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter10: The Basics Of Capital Budgeting: Evaluating Cash Flows

Section: Chapter Questions

Problem 23SP

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