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Assume the following investment opportunities (Investments available)

1. $600,000 cost, returns $170,000 per year for 6 years

2. $800,000 cost, returns $200,000 year 1, $400,000 year 2, $500,000 year 3

3. $1,000,000 cost, returns $151,426 per year, 16 years

4. $1,500,000 cost, returns $250,000 years 1-5, $300,000 years 6-10

5. $750,000 cost, returns $10,000,000 at the end of 25 years

6. $2,500,000 cost, returns $500,000 per year for 7 years

7. Cost $200,000 per year for t0 - t7, returns $2,200,000 at the end of 8 years

8. Cost $1,750,000, returns $150,000 for 20 years

Graph the WACC schedule and the IOS schedule, and show the capital expenditure budget for the company. Give the dollar amount of investment spending.

Explain your answer in terms of maximizing shareholder wealth.

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M91600639

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