Windsor Companies has generated the following list of independent projects. Give

Question

Windsor Companies has generated the following list of independent projects. Given the firm%u2019s 18% cost of capital all of the projects are acceptable. Unfortunately, the cost to undertake them all would exceed the company%u2019s $500,000 budget. Given this dilemma, which combination of projects should Windsor undertake? Justify your answer.

Project ICO NPV IRR PI

A $250,000 $160,000 21.2% 1.640

B $225,000 $150,000 19.6% 1.667

C $200,000 $45,000 18.7% 1.225

D $175,000 $110,000 22.9% 1.629

E $150,000 $135,000 19.1% 1.900

F $125,000 $70,000 24.8% 1.560

G $100,000 $85,000 20.2% 1.850

H $75,000 $40,000 26.4% 1.533

I $50,000 $25,000 21.2% 1.500

J $25,000 $20,000 23.7% 1.800

Explanation / Answer

C $200,000 $45,000 18.7% 1.225

higher the investment higher is the profit.

interest rate is also fine

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