A firm is considering three investment projects which we will refer to as A, B, and C. Each project has an initial?

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Which of the following is most appropriate hurdle or discount rate for evaluatin...
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Muhammad
10-August-2014

cost of $10 million. Investment A offers an expected rate of return of16%, B of8%, and C of12%. The firm's cost of capital is6% if it borrows $10 million,10% if it borrows $20 million, and15% if it borrows $30 million. Which project(s) should the firm invest in?

a. Just A, because it offers the highest rate of return and is the only investment that has a rate of return higher than15%

b. All three should be undertaken, because the rate of return on B is above6%, on C is above10%, and on A is above15%.

c. Only A and C should be undertaken because both have rates of return that are greater than10%.

d. None of the above is correct.

Logistics ERP Project Management Business Development Management

Question added by Emad Mohammed said abdalla , ERP & IT Software, operation general manager . , AL DOHA Company
Date Posted: 2015/08/03

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6 Answers

by khaled elkholy , HR MANAGER , misk for import & export

Only A and C should be undertaken because both have rates of return that are greater than10%. Is.........right........

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Ayoub Tartir , PMP, GWCPgM, CISA, CISSP, CAP, CSSLP, FITSP-D, CEH, CHFI, CCNA, CCNA Security, Security+, Network+

by Ayoub Tartir , PMP, GWCPgM, CISA, CISSP, CAP, CSSLP, FITSP-D, CEH, CHFI, CCNA, CCNA Security, Security+, Network+ , IT Security Expert , Information Unlimited Inc. (IUI)

Option (C) Only A and C should be undertaken

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Emad Mohammed said abdalla

by Emad Mohammed said abdalla , ERP & IT Software, operation general manager . , AL DOHA Company

The correct answer was: c. Only A and C should be undertaken because both have rates of return that are greater than10%..

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by Ismael Hamad , Trainer , ANTONOIL DMCC , Lukoil project, WQ2

My choice answer are ........C

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Gayasuddin Mohammed

by Gayasuddin Mohammed , Advocate , Practicing Law before High Court at Hyderabad

Option (C) is the answer****************

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by Yaqoub Alomar , Civil Engineer , Al-Zubeir municipality

Agree with experts

*********************

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