Consider the following information about 5 projects. Which project or projects are acceptable based on the information provided? Select all that apply. Project Initial cost Cost of capital Capital budgeting analysis A $15 million 8% NPV = $5 million B $20 million 10% PI = 0.92 $8 million 11% IRR = 14% ::::: D $25 million 9% NPV = negative $8 million E $18 million 9% IRR = 7% O A O B OD

Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter15: Capital Investment Analysis
Section: Chapter Questions
Problem 15.3.3P
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Consider the following information about 5 projects. Which project or projects are acceptable based on the information provided? Select all that apply.
Project
Initial cost
Cost of capital
:::::::::::::::::::::::::::::::
Capital budgeting analysis
A
$15 million
8%
NPV = $5 million
B
$20 million
10%
:::: :
PI = 0.92
$8 million
11%
IRR = 14%
::: :::::::::::
D
$25 million
9%
NPV = negative $8 million
E
$18 million
9%
IRR = 7%
O A
O B
O E
Transcribed Image Text:Consider the following information about 5 projects. Which project or projects are acceptable based on the information provided? Select all that apply. Project Initial cost Cost of capital ::::::::::::::::::::::::::::::: Capital budgeting analysis A $15 million 8% NPV = $5 million B $20 million 10% :::: : PI = 0.92 $8 million 11% IRR = 14% ::: ::::::::::: D $25 million 9% NPV = negative $8 million E $18 million 9% IRR = 7% O A O B O E
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