If the corporation has a weighted average cost of capital of 10%, which project should be selected?

A corporation’s financial analyst has identified four potential protects that ate mutually exclusive. Each protect will produce a constant annual cash flow for years 1 through 4, and have an initial investment at time 0 shown below.

If the corporation has a weighted average cost of capital of 10%, which project should be selected?

A . Protect 1
B. Protect 2
C. Protect 3
D. Protect 4

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Answer: D