Module 6 CT Questions & Answers_ Spring

After analyzing the project opportunities for Galaxy Satellite Co. I found that each one provides cash flows greater to the initial investment increasing the market value of the firm. Project B and Project D both utilize a higher amount of the capital budget and provide greater NPV amounts on their own, however, by combining Projects C and D the investments maximize the capital budget and provide the greatest NPV of $410,000. When taking into consideration the IRR, Projects B and C allow the greatest return on investment of 25% and 24%. In the case for Project B, the capital budget is maximized on its own with an NPV of $320,000 and an IRR of 25%. Project C utilizes a small portion of the budget with an NPV of $60,000 but an impressive IRR of 24%. Project D provides the largest NPV of $350,000 and an IRR of 23%. My recommendation would be to accept both Projects C and D. These two projects create the greatest combination and opportunity of NPV as well as IRR. Best regards,