Comapny Z is considering the following projects: (lettered a - i A 4million 14%
ID: 2687732 • Letter: C
Question
Comapny Z is considering the following projects: (lettered a - i A 4million 14% rate of return high risk b 5 million 11.5% rate of return high risk c 3 million 9.5% rate of return low risk d 2 million 9% rate of return average risk e 6 million 12.5% rate of return high risk f 5 million 12.5% rate of return average risk g 6 million 7% rate of return low risk h 3 million 11.5% rate of return low risk If they can only invest 13% and WACC is 10% for ave projects 12% for high risk projects and 8% for low risk projects which ones should they accept and what is the capital budget. The total amount of projects considered is $34 million. Do I take a % of 34 mill and apply to the accpetable proijects?Explanation / Answer
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