Using the NPV index approach to ranking projects, which projects should the firm accept? * A firm must choose from six capital budgeting proposals outlined below. The firm is subject to capital rationing and has a capital budget of P1,000,000; the firm's cost o capital is 15 percent. Project Initial investment P200,000 400,000 250,000 200,000 150,000 400,000 IRR 19% 17 16 12 20 15 NPV P100,000 20,000 60,000 -5,000 50,000 150,000 4 5 O 1, 6, 5 and 3 O 1, 2, 3, and 5 O 2, 3, 4, and 6 O 1, 3, 4, and 6
Using the NPV index approach to ranking projects, which projects should the firm accept? * A firm must choose from six capital budgeting proposals outlined below. The firm is subject to capital rationing and has a capital budget of P1,000,000; the firm's cost o capital is 15 percent. Project Initial investment P200,000 400,000 250,000 200,000 150,000 400,000 IRR 19% 17 16 12 20 15 NPV P100,000 20,000 60,000 -5,000 50,000 150,000 4 5 O 1, 6, 5 and 3 O 1, 2, 3, and 5 O 2, 3, 4, and 6 O 1, 3, 4, and 6
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter11: Determining The Cost Of Capital
Section: Chapter Questions
Problem 5Q: Suppose a firm estimates its overall cost of capital for the coming year to be 10%. What might be...
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