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28 Sep 2019
Project IRR Cost NPV at 9%
A 18% $4,000,000 1,000,000
B 16% $1,000,000 200,000
C 14% $5,000,000 900,000
D 12% $2,000,000 400,000
E 10% $3,000,000 100,000
15. Which set of projects would maximize shareholder wealth if they have a capital budget of $7,000,000?
a. A and C.
b. A and E.
c. A, B, and D.
d. B and D.
16. Suppose it can raise the following amounts at different costs of capital. Which set of projects would maximize shareholder wealth?
WACC Amount Raised
9% $10,000,000
11% $12,000,000
13% $15,000,000
a. A and B.
b. A, B, and C.
c. A, B, and D.
d. A, B, C, and D.
Project IRR Cost NPV at 9%
A 18% $4,000,000 1,000,000
B 16% $1,000,000 200,000
C 14% $5,000,000 900,000
D 12% $2,000,000 400,000
E 10% $3,000,000 100,000
15. Which set of projects would maximize shareholder wealth if they have a capital budget of $7,000,000?
a. A and C.
b. A and E.
c. A, B, and D.
d. B and D.
16. Suppose it can raise the following amounts at different costs of capital. Which set of projects would maximize shareholder wealth?
WACC Amount Raised
9% $10,000,000
11% $12,000,000
13% $15,000,000
a. A and B.
b. A, B, and C.
c. A, B, and D.
d. A, B, C, and D.
Beverley SmithLv2
28 Sep 2019