Explain the three investment projects

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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.)

Reference no: EM133206333

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