Multiple Choice
A company estimates that an average-risk project has a WACC of 10 percent, a below-average-risk project has a WACC of 8 percent, and an above-average-risk project has a WACC of 12 percent. Which of the following independent projects should the company accept?
A) Project A has average risk and an IRR = 9 percent.
B) Project B has below-average risk and an IRR = 8.5 percent.
C) Project C has above-average risk and an IRR = 11 percent.
D) All of the projects above should be accepted.
E) None of the projects above should be accepted.
Correct Answer:
Verified
Correct Answer:
Verified
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