SkyHigh Airlines Has Five Possible Investment Projects for the Coming

question 95

Multiple Choice

SkyHigh Airlines has five possible investment projects for the coming year.Each project is indivisible.They are:
SkyHigh's weighted marginal cost of capital schedule is 12 percent for up to $6 million of investment; 16 percent for between $6 million and $18 million of investment; and above $18 million the weighted cost of capital is 18 percent.The optimal capital budget is:

• A) $12 million.
• B) $18 million.
• C) $23 million.
• D) $28 million.

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Definitions:

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