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IED www.mathxl.com/Stu x?homework!d=439506576&questio; School Tools How to take a screenshot on your Mac Ap Course Home Do Homework Allenson Gepford Chegg Study Guided Solutions and Stu BA 303 Fall 2017 Allenson Gepford 1 1 1/26/17 4:55 PM Homework: Homework 9 Chapters 9 and 12 Score: 0 of 8 pts P12-18 (similar to) Save 41 of 42 (38 complete) Score: 62.96%, 68 of 108 pts Question Help Capital rationing IRR and NPV approaches Valley Corporation is attempting to select the best of a group of independent projects competing for the firm's fixed capital budget of $4.16 million. The firm recognizes that any unused portion o this budget will earn less han s 14% cost o capital, thereby resulting in a present value ofin ows tat is ess than the initial Investment. The firm has summarized in the following table, the key data o be used in selecting the best group of projects. Initial Investment S4,660,000 725,000 1,700,000 1,275,000 725,000 2,460,000 975,000 Project IRR Present value of inflows at 14% 16% 18 21 19 $5,060,000 1,025,000 2,000,000 1,375,000 825,000 2,960,000 1,075,000 a. Use the intemal rate of retum (IRR) approach to select the best group of projects. Using the internal rate of return (IRR) approach, the best group of projects to select is V. (Select from the drop-down menu) Click to select your answerfs) and then click Check Answer Clear All Check Answer

Explanation / Answer

Answer is F,B and G

Project Investment IRR F 2460000 22% B 725000 22% G 975000 19% Total 4160000

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