A firm has a budget ceiling of Rs 100,000 for capital expenditures. 1 answer below »

A firm has a budget ceiling of Rs 100,000 for capital expenditures. The following proposal with associated profitability index and IRR have been identified:

                              Cash Outlay       Profitability         Internal Rate

        Proposals            (Rs)                  Index             of Return (%)   

        A                       100,000                 1.22                        15             

        B                        50,000                  1.17                        14             

        C                        40,000                  1.46                        20             

        D                        30,000                  1.72                        25             

        E                        20,000                  1.13                        13             

        F                         10,000                  1.04                        11             

      Which project(s) should be undertaken? Which method would you prefer in making your recommendation and why?

 

"Is this question part of your assignment? We can help"

ORDER NOW