Provide:
A firm has a WACC of 10% until it has raised $100 million. Beyond that the WACC is 12%. The firm has the following projects and associated costs:
Project A has a cost of $50 million and an IRR of 4%; project B has a cost of $70 million and an IRR of 6%; and project C has a cost of $35 million and an IRR of 8%.
Which of these three projects should be rejected? Please provide step by step solution.