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