Speedy Delivery Systems can buy a piece of equipment that is anticipated to provide an 11% return and can be financed at 6% with debt.Later in the year The Firm turns down an opportunity to buy a new machine that would yield a 9% return but would cost 15% to finance through common Equity assume debt and common Equity each represent 50% of the firm's capital structure.
A. Compute the weighted average cost of capital.
B. Which project should be accepted?