NPV, with rankings Botany Bay, Inc., a maker of casual clothing, is considering four projects. Because of past financial difficulties, the company has a high cost of capital at 15%. Which of these projects would be acceptable under those cost circumstances?
a. Calculate the NPV of each project, using a cost of capital of 15%.
b. Rank acceptable projects by NPV.
c. Calculate the IRR of each project, and use it to determine the highest cost of capital at which all of the projects would be acceptable.
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