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Meds R Us has just finished evaluating several projects. Their cost of capital is 10%. NPV’s are calculated by the firm’s current cost of capital.

Project Cost NPV IRR

A $12,000 $ -3,000 9%

B $42,000 $12,000 17%

C $45,000 $ 6,000 12%

D $51,000 $12,000 16%

E $63,000 $15,000 11%

A. With no capital rationing, and assuming the projects are of the same risk, which projects should Meds R Us accept? Why?

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M92167216

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