Cost of Capital
Question # 00655112
Posted By:
Updated on: 02/24/2018 08:16 PM Due on: 02/25/2018
| 1. As the director of capital budgeting for Ryder Corporation, you are evaluating two mutually | ||||||
| exclusive projects with the following net cash flows:. If Ryder's cost of capital is 15 percent, | ||||||
| Which project would you choose? Why? (please use numbers to justify your answer) | ||||||
| Project X | Project Y | |||||
| Year | Cash Flow | Cash Flow | ||||
| 0 | -100,000 | -100,000 | ||||
| 1 | 50,000 | 10,000 | ||||
| 2 | 40,000 | 30,000 | ||||
| 3 | 30,000 | 40,000 | ||||
| 4 | 10,000 | 60,000 | ||||
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Solution: Cost of Capital