Problem:
A firm has the following investment opportunities:
Investment
NPV
IRR
Project A
Investment $150,000
NPV $30,000
IRR 14%
Project B
Investment $120,000
NPV $20,000
IRR 13%
Project C
Investment $100,000
NPV $25,000
IRR 12%
Project D
Investment $ 10,000
NPV $ 6,000
IRR 11%
If the cost of capital is 10% and the capital budget is limited to $280,000, which project(s) should the firm undertake?
a. project A, B, and C
b. project A and C
c. project A and B
d. project A, B, and D