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Galaxy Satellite Co. is attempting to select the best group of independent projects competing for the firm's fixed capital budget of $10,000,000. Any unused portion of this budget will earn less than its 20 percent cost of capital. A summary of key data about the proposed projects follows. Initial Investment $3,000,000 $9,000,000 $1,000,000 $7,000,000 Project A PV of inflows at 20% $3,050,000 $9,320,000 $1,060,000 $7,350,000 IRR 21% В 25% 24% 23% D Use the NPV approach to select the best group of projects.

Galaxy Satellite Co. is attempting to select the best group of independent projects competing for the firm's fixed capital budget of $10,000,000. Any unused portion of this budget will earn less than its 20 percent cost of capital. A summary of key data about the proposed projects follows. Initial Investment $3,000,000 $9,000,000 $1,000,000 $7,000,000 Project A PV of inflows at 20% $3,050,000 $9,320,000 $1,060,000 $7,350,000 IRR 21% В 25% 24% 23% D Use the NPV approach to select the best group of projects.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Use the NPV approach to select the best group of projects. Select ALL the projects to be combined to maximize the NPV.

Project A

Project B

Project C

Project D

Galaxy Satellite Co. is attempting to select the best group of independent projects competing for the firm's fixed capital budget of $10,000,000. Any unused portion of this budget will earn less than its 20 percent cost of capital. A summary of key data about the proposed projects follows. Initial Investment $3,000,000 $9,000,000 $1,000,000 $7,000,000 IRR Project A PV of inflows at 20% $3,050,000 $9,320,000 $1,060,000 $7,350,000 21% В 25% 24% 23% Use the NPV approach to select the best group of projects.
Transcribed Image Text:Galaxy Satellite Co. is attempting to select the best group of independent projects competing for the firm's fixed capital budget of $10,000,000. Any unused portion of this budget will earn less than its 20 percent cost of capital. A summary of key data about the proposed projects follows. Initial Investment $3,000,000 $9,000,000 $1,000,000 $7,000,000 IRR Project A PV of inflows at 20% $3,050,000 $9,320,000 $1,060,000 $7,350,000 21% В 25% 24% 23% Use the NPV approach to select the best group of projects.
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