Determine which projects should the firm? accept

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Point 1: A firm must choose from six capital budgeting proposals outlined below. The firm is subject to capital rationing and has a capital budget of? $1,000,000; the? firm's cost of capital is 15 percent.

Project                        Initial Investment                   IRR                   NPV

1                                $200,000                         19%              $100,000

2                                  400,000                          17                  20,000

3                                   250,000                         16                   60,000

4                                   200,000                          12                    -5,000

5                                   150,000                           20                    50,000

6                                    400,000                           15                     150,000

Question 1: Using the net present value approach to ranking? projects, which projects should the firm? accept?

Reference no: EM132485236

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