Galaxy Satellite Co. is attempting to select the best group of independent projects competing for the firm’s fixed capital budget of $10,000,000. Any unused portion of this budget will earn less than its 20 percent cost of capital. A summary of key data about the proposed projects follows.
Project |
PV of Inflows |
Initial Investment |
IRR |
|
A |
$3,050,000 |
$3,000,000 |
21% |
|
B |
$9,320,000 |
$9,000,000 |
25% |
|
C |
$1,060,000 |
$1,000,000 |
24% |
|
D |
$7,350,000 |
$7,000,000 |
23% |
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