3. The Ajax Corporation has the following set of projects available to it: PROJECT INVESTMENT EXPECTED RATE OF REQUIRED (SMILLIONS) RETURN (%) 500 23.0 75 18.0 50 21.0 125 16.0 E 300 14.0 F 150 13.0 250 19.0 Ajax can raise funds with the following marginal costs: First $250 million 14.0% Next 250 million 15.5 Next 100 million 16.0 Next 250 million 16.5 Next 200 million 18.0 Next 200 million 21.0 Use the marginal cost and marginal revenue concepts developed in the chapter to derive an optimal capital budget for Ajax.

3. The Ajax Corporation has the following set of projects available to it: PROJECT INVESTMENT EXPECTED RATE OF REQUIRED (SMILLIONS) RETURN (%) 500 23.0 75 18.0 50 21.0 125 16.0 E 300 14.0 F 150 13.0 250 19.0 Ajax can raise funds with the following marginal costs: First $250 million 14.0% Next 250 million 15.5 Next 100 million 16.0 Next 250 million 16.5 Next 200 million 18.0 Next 200 million 21.0 Use the marginal cost and marginal revenue concepts developed in the chapter to derive an optimal capital budget for Ajax.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter1: Introduction And Goals Of The Firm

Section: Chapter Questions

Problem 2.5CE: Energy entrepreneur T. Boone Pickens has proposed converting the trucking fleet in the United States...

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