Constraints on borrowing. Runway Fashions, Inc. is considering the following potential projects for the company, but has only $1,000,000 in the capital budget. Which projects should it choose? Click on the Icon D in order to copy its content into a spreadsheet. Project Winter coats Spring dresses Fall suits Summer sandals Cost $750,000 $500,000 $500,000 $400,000 NPV IRR 13% $95,000 $45,000 $55,000 $60,000 9% 11% 14% Which projects should it choose? (Select the best responses.) O A. Winter coats only. B. Spring dresses and fall suits. c. Winter coats and summer sandals. D. Summer sandals and fall suits. O E. Spring dresses and summer sandals.
Constraints on borrowing. Runway Fashions, Inc. is considering the following potential projects for the company, but has only $1,000,000 in the capital budget. Which projects should it choose? Click on the Icon D in order to copy its content into a spreadsheet. Project Winter coats Spring dresses Fall suits Summer sandals Cost $750,000 $500,000 $500,000 $400,000 NPV IRR 13% $95,000 $45,000 $55,000 $60,000 9% 11% 14% Which projects should it choose? (Select the best responses.) O A. Winter coats only. B. Spring dresses and fall suits. c. Winter coats and summer sandals. D. Summer sandals and fall suits. O E. Spring dresses and summer sandals.
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
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Chapter 11, Question 6
Transcribed Image Text:**Constraints on borrowing**: Runway Fashions, Inc. is considering the following potential projects for the company but has only $1,000,000 in the capital budget. Which projects should it choose?
**Table: Project Information**
| Project | Cost | NPV | IRR |
|-----------------|-----------|--------|------|
| Winter coats | $750,000 | $95,000| 13% |
| Spring dresses | $500,000 | $45,000| 9% |
| Fall suits | $500,000 | $55,000| 11% |
| Summer sandals | $400,000 | $60,000| 14% |
**Which projects should it choose?** *(Select the best responses.)*
Options:
- A. Winter coats only.
- B. Spring dresses and fall suits.
- C. Winter coats and summer sandals.
- D. Summer sandals and fall suits.
- E. Spring dresses and summer sandals.
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