Project 1 Project 2 project 3 Project 4 Initial CF -4,000,000 -5,000,000 -10,000,000 5,000,000 Year 1...

	Project 1	Project 2	project 3	Project 4
Initial CF	-4,000,000	-5,000,000	-10,000,000	5,000,000
Year 1 CF	1,000,000	2,000,000	4,000,000	2,700,000
Year 2 CF	2,000,000	3,000,000	6,000,000	2,700,000
Year 3 CF	3,000,000	3,000,000	5,000,000	2,700,000

You have a $10 million capital budget and must make the decision about which investments your firm should accept for the coming year. The firm’s cost of capital is 12 percent. Use the information on the four projects to determine what project(s) your firm should accept on the basis of NPV?

Group of answer choices

A.) Projects 3, 4

B.) Projects 2, 4

C.) Project 3

D.) Projects 1, 2

Expert Solution

jeff jeffy answered 2 years ago

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