Financial Review of Southern Textiles Essay Example | Topics and Well Written Essays - 1250 words

Financial Review of Southern Textiles - Essay Examplef) Based on the information about potential returns on investments in the first paragraph and information 0n marginal cost of capital ( in parts a, c, and e) how large a capital investment budget should the firm personaProject A will affix the firms processed yarn capacity and has an expect return of 15% after taxes. Project B will increase the capacity for woven fabrics and carries a return of 13.5%. Project C, a venture into synthetic fibers, is expected to earn 11.2% and Project D, an investment into dye and textile chemicals, is expected to show a 10.5 % return.Project A15%25 cardinalProject B13.50%25millionProject C11.20%25millionProject D10.50%25million100Project C and D yield lower rates of return than 11.304% . Hence they should not be taken up Investment budget should be for Projects A and B= 25+25=50 milliong) Graph the answer determined in part f.