Explain how would that affect your overall answers

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Reference no: EM1363895

Stone and Rock Company uses a process of capital rationing in its decision making. The firm's cost of capital is 12 percent. It will invest on $80,000 this year. It has determined the internal rate of return for each of the following projects.

Project Project Size Internal rate of return

A.......... $15,000 14%
B.......... 25,000 19
C.......... 30,000 10
D.......... 25,000 16.5
E.......... 20,000 21
F.......... 15,000 11
G.......... 25,000 18
H.......... 10,000 17.5

a. Pick out the projects that the firm should adopt.

b. If Projects B and G are mutually exclusive, how would that affect your overall answers? That is, which projects would you accept in spending the $80,000?

Reference no: EM1363895

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