Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. if the opportunity cost of capital is 11%, and you

If the opportunity cost of capital is 11%, and you have unlimited access to the...

70.2K

Verified Solution

Question

Finance

image

If the opportunity cost of capital is 11%, and you have unlimited access to the capital, which one(s) would you accept? What would be your action if the cost of capital is 16%? b. Suppose that you have limited access to the capital and you need to choose only one project. Which one would you choose? The discount rate is still 11%. c. What is the payback period of each project? Please analyse if in general decision based on payback is consistent with decision based on NPV. d. What are the internal rates of return (IRR) on the three projects? Does the IRR rule in this case give the same decision as NPV? e. If the opportunity cost of capital is 11%, what is the profitability index for each project? Please analyse if in general decisions based on profitability index is consistent with decisions based on NPV. f. What is the most generally accepted measure to choose between the projects? Please justify your answer. Please explain answer in detail and provide in-text citations.

Cash Flows ($) Project C C2 C CA A -5,000 + 1,000 + 1,000 +3,000 0 B 0 -1,000 -5,000 +1,000 +1,000 +2,000 +3,000 +3,000 +5,000 C +1,000

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Accounting
1.2K views

On January 1, 2018, the general ledger of ACME Fireworks includes the following account balances:      Accounts Debit Credit   Cash $ 25,100   Accounts Receivable 46,200   Allowance for Uncollectible...

Medical Sciences
1.2K views

c. what are the Motor divisions of the ANS d. Which motor division provides craniosacral outflow...

Biology
1.2K views

QUESTION 20 If you shine light on chloroplasts and measure the rate of photosynth rate...

Physics
1.2K views

b Describe the various type of torques present in the measuring instruments their type and...

Geometry
1.2K views

How many triangles exist that fit the following criteria?C= 140, c = 6, a =...

Geometry
1.2K views

Question 8 1 point B Your Answer E C If BE 10 ED 12 and...

Geometry
1.2K views

entity relationship diagram for telecommunication

Statistics
1.2K views

The mean starting salary for nurses is 67 694 dollars nationally The stand 10 333...

Calculus
1.2K views

Use a calculator to approximate the following sin 6 3812 cos 6 3812

Algebra
1.2K views

21 197 23 2 OFI 8 8 8 P 6 9 HANS k 1 19...

Algebra
1.2K views

7 If you spent 25 weekly on lottery tickets how much would you spend in...

Accounting
1.2K views

Which of the following statements is NOT true? Select one: a....