The Cooper Electronics Company has developed the following schedule of potential investment projects that may be undertaken during the next six months:
Project Cost (in Millions of Dollars) Expected Rate of Return
A $3.0 20%
B 1.5 22
C 7.0 7
D 14.0 10
E 50.0 12
F 12.0 9
G 1.0 44
a. If Cooper requires a minimum rate of return of 10 percent on all investments, which projects should be adopted?
b. In general, how would a capital budgeting constraint on the available amount of investment funds influence these decisions?
c. How would differing levels of project risk influence these decisions?