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A firm must choose from six capital budgeting proposalsoutlined below. The firm is subject to capital rationing, has acapital budget of $1,000,000 and the firm’s cost of capital is 15percent. Using the net present value approach to ranking projects,which projects should the firm accept?Projects:123456Initial Investment$200,000$400,000$250,000$200,000$150,000$400,000IRR14%12%10%15%12%12%NPV$100,000$20,000$60,000$(5,000)$50,000$150,0001, 3, 5, and 61, 2, 3, 4, and 52, 3, 4, and 51, 3, 4, 5 and 6
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