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The Cooper Electronics Company has developed the following schedule of potential investment projects that may be undertaken during the next six months:

Project Cost (in Millions of Dollars) Expected Rate of Return
A $ 3.0 20%


B 1.5 22


C 7.0 7


D 14.0 10


E 50.0 12


F 12.0 9


G 1.0 44


a. If Cooper requires a minimum rate of return of 10 percent on all investments, which projects should be adopted?
b. In general, how would a capital budgeting constraint on the available amount of investment funds influence these decisions?
c. How would differing levels of project risk influence these decisions?

 

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M9879102

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