The document presents cash flow information for three potential investment projects - Alpha, Beta, and Theta. Project Alpha has the highest internal rate of return at 11.2%, meeting the company's required return threshold of 11%. Therefore, if the decision is based solely on financial information, Project Alpha should be funded.

1. You work for a company, which expects to earn at least 11 percent on its investments. The
following chart shows the cash information for three potential projects. Which of the projects
would you fund if the decision is based only on financial information? Why?
Project Alpha
Inflow
Outflow
Year
0
$ -
$ 750,000.00
1
$ -
$ 250,000.00
2
$ 350,000.00
3
$ 350,000.00
4
$ 300,000.00
5
$ 150,000.00
6
$ 150,000.00
7

2. $ 100,000.00
8
$ 90,000.00
Project Beta
Inflow
Outflow
Year
0
$ -
$ 1,000,000.00
1
$ 400,000.00
2
$ 350,000.00
3
$ 250,000.00
4
$ 150,000.00
5
$ 100,000.00
6
$ 50,000.00
Project Theta

3. Inflow
Outflow
Year
0
$ -
$ 400,000.00
1
$ -
$ 350,000.00
2
$ 150,000.00
3
$ 150,000.00
4
$ 150,000.00
5
$ 150,000.00
6
$ 150,000.00
7
$ 150,000.00
8
$ 150,000.00

4. 9
$ 150,000.00
Project AlphaInflow Outflow
Year
0 $ - $ 750,000.00
1 $ - $ 250,000.00
2 $ 350,000.00
3 $ 350,000.00
4 $ 300,000.00
5 $ 150,000.00
6 $ 150,000.00
7 $ 100,000.00
8 $ 90,000.00