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A firm has a capital budget of $30,000 and is considering three possible independent projects. 1 answer below » A firm has a capital budget of $30,000 and is considering three possible independent projects. Project A has a present outlay of $12,000 and yields $4, 281 per annum for 5 years. Project B has a present outlay of $10,000 and yields $4,184 per annum for 5 years. Project C has a present outlay of $17,000 and yields $5,802 per annum for 10 years. Funds which are not allocated View complete question » A firm has a capital budget of $30,000 and is considering three possible independent projects. Project A has a present outlay of $12,000 and yields $4, 281 per annum for 5 years. Project B has a present outlay of $10,000 and yields $4,184 per annum for 5 years. Project C has a present outlay of $17,000 and yields $5,802 per annum for 10 years. Funds which are not allocated to one of the projects can be placed in a bank deposit where they will earn 15% (the discount rate for the project). Identify six combinations of project investments and a bank deposit which exhaust the budget. Which of the above combinations should the firm choose: when the reinvestment rate is 15%? when the reinvestment rate is 20%? Explain your answer and show your calculations (spreadsheet printout is acceptable as long as entries are clearly labeled). View less » Aug 21 2015 03:37 PM
