A company has a required rate of return of 15% for five potential projects. The company...

A company has a required rate of return of 15% for five potential projects. The company has a maximum of $500,000 available for investment and cannot raise any capital. Details about the five projects are as follows:

Project	Initial Outlay	Net Present Value at 15%	Internal Rate of Return
1	$500,000	$125,000	23%
2	250,000	75,000	17%
3	150,000	25,000	35%
4	100,000	50,000	25%
5	150,000	50,000	25%

The company should choose which of the following projects?

a. Project 1 only.

b. Projects 2, 3, and 4 only.

c. Projects 2, 4, and 5 only.

d. Projects 3, 4, and 5 only.

Expert Solution

ekkarill92 answered 1 year ago

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