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# Calculating the amount that can be raised and invested

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If XYZ Corp. can undertake the following projects:

Project 1:
Required investment: \$10 million
Expected rate of return: 12%

Project 2:
Required investment: \$2 million
Expected rate of return: 15%

Project 3:
Required investment: \$5 million
Expected rate of return: 10%

Project 4:
Required investment: \$8 million
Expected rate of return: 17%

It can raise up to \$10 million at a cost of capital of 10%
From \$10 to \$20 million at a cost of capital of 15%
Over \$20 million, its cost of capital is 20%.

What is the amount of money (in millions) that will be raised and invested?

https://brainmass.com/economics/international-economies/calculating-amount-raised-invested-404982

#### Solution Preview

Let us consider the investment with highest return i.e. Project 4.
Total investment required=\$8 million
Expected rate of return=17%
This can be financed by the capital with 10% cost.
Total Capital raised= \$8 ...

#### Solution Summary

The solution describes the steps to calculate the amount that can be raised and invested in line with given proposals.

\$2.49