The investment opportunities which should be selected are: A, B, D, and E.B, C, D, and E.A, B, C, and E.A, B, C, and D. A firm's current investment opportunity schedule and the weighted marginal cost of capital scheduleare shown below.Investment Opportunity ScheduleİRRInitial15%12191016Investment200,000300,000100,000400,000300,000Weighted Marginal Cost of CapitalWMCCRange of total new financing- P250,000250,001 - 500,000500,001PO7.5%8.910.0- 1,000,0001,000,001 - 1,500,00012.0ABCDE

Capital rationing: It is the demonstration of putting limitations on how much new ventures or tasks…

A firm's current investment opportunity schedule and the weighted marginal cost of capital schedule are shown below. Investment Opportunity Schedule IRR Initial Investment 200,000 300,000 100,000 400,000 300,000 15% 12 19 10 16 Weighted Marginal Cost of Capital WMCC Range of total new financing - P250,000 250,001 - 500,000 500,001 7.5% 8.9 PO - 1,000,000 10.0 1,000,001 - 1,500,000 12.0 ABCDE

A firm's current investment opportunity schedule and the weighted marginal cost of capital schedule are shown below. Investment Opportunity Schedule IRR Initial Investment 200,000 300,000 100,000 400,000 300,000 15% 12 19 10 16 Weighted Marginal Cost of Capital WMCC Range of total new financing - P250,000 250,001 - 500,000 500,001 7.5% 8.9 PO - 1,000,000 10.0 1,000,001 - 1,500,000 12.0 ABCDE

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter11: The Cost Of Capital

Section: Chapter Questions

Problem 17PROB

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