A company estimates that an average-risk project has a wacc, Finance Basics

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A company estimates that an average-risk project has a wacc

Question: A company estimates that an average-risk project has a WACC of 9%, a below-average risk project has a 7% cost of capital, and an above-average risk project has an 11% cost of capital. Which of the following projects should the company accept?

a. Project A which has average risk and an IRR of 9.5%

b. Project B which has below-average risk and an IRR of 6.35%

c. Project C which has above-average risk and an IRR of 10.5%

d. All of the projects are acceptable

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Finance Basics: A company estimates that an average-risk project has a wacc

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Finance Basics: A company estimates that an average-risk project has a wacc

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