An investor has a budget of $35 million. He can invest in the projects shown above. If the cost of capital is 8%, what investment or investments should he make?
Initial Investment Cash flow
Project A $35 million $14 million per year for four years
Project B $21 million $7 million per year for five years
Project C $14 million $7 million per year for four years
Project D $21 million $10.5 million per year for three years
A) Project A
B) Project B
C) Project B and Project C
D) Project C and Project D
Answer: C
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