Reference no: EM133206333
E-saline is a French company that has €770 million of cash resources available at t0. It has identified three investment projects, as follows (all values in € millions):
Project A B C
Outlay at t0 270 300 200
Inflow at t1 340 350 230
Assume that all projects exhibit constant returns to scale. If the market interest rate moved to 20% and 10% then which project will be accepted?
Please select one answer from the possible answers.
a) At 10% which project will be accepted (possible answers are: None of them, A and C, B and C, C only, All of them, A only, A and B, B only.)
b) At 20% which project will be accepted (possible answers are: None of them, A and C, B and C, C only, All of them, A only, A and B, B only.)