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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?

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    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.

    $2.19