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

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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