Midwest Water Worksestimates that its WACC is 10.5%. The company is consideringthe following capital budgeting projects:
Project Size Rate of Return
A $1million 12.0%
B 2million 11.5
C 2million 11.2
D 2million 11.0
E 1 million 10.7
F 1million 10.3
G 1million 10.2
Assume that each of these projects is just as risky as the firm's existing assets and that the firm may accept all theprojects or only some of them. Which set of projects should be accepted? Explain.