If texas transport is only using irr to choose

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Reference no: EM13272007

Texas Transport has five possible investment projects for the coming year. Each project is indivisible. They are:

Project Investment (million) IRR

A $ 6 18%

B $10 15%

C $ 9 20%

D $ 4 12%

E $ 3 24%

The firm's weighted marginal cost of capital schedule is 12 percent for up to $6 million of investment; 16 percent for between $6 million and $18 million of investment; and above $18 million the weighted cost of capital is 18 percent. If Texas Transport is only using IRR to choose their projects, they will decide that their optimal capital budget is

A) $12 million.

B) $18 million.

C) $23 million.

D) $28 million.

Reference no: EM13272007

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