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Geothermal's WACC is 11.7%. Executive Fruit's WACC is 12.3%. Now Executive Fruit is considering an investment in geothermal power production. a. Should it discount project cash flows at 12.3%? b. What would be a better discount rate for this investment? Note: Enter your answer as a percent rounded to 1 decimal place. a. Should it discount project cash flows at 12.3%? b. Better discount rate %

Geothermal's WACC is 11.7%. Executive Fruit's WACC is 12.3%. Now Executive Fruit is considering an investment in geothermal power production. a. Should it discount project cash flows at 12.3%? b. What would be a better discount rate for this investment? Note: Enter your answer as a percent rounded to 1 decimal place. a. Should it discount project cash flows at 12.3%? b. Better discount rate %

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Geothermal's WACC is

11.7%

. Executive Fruit's WACC is

12.3%

. Now Executive Fruit is considering an investment in geothermal power production.\\na. Should it discount project cash flows at

12.3%

?\\nb. What would be a better discount rate for this investment?\\nNote: Enter your answer as a percent rounded to 1 decimal place.\\n\\\\table[[a. Should it discount project cash flows at

12.3%?

,],[b. Better discount rate,]]

Geothermal's WACC is 11.7%. Executive Fruit's WACC is 12.3%. Now Executive Fruit is considering an investment in geothermal power production. a. Should it discount project cash flows at 12.3%? b. What would be a better discount rate for this investment? Note: Enter your answer as a percent rounded to 1 decimal place. a. Should it discount project cash flows at 12.3%? b. Better discount rate %
Transcribed Image Text:Geothermal's WACC is 11.7%. Executive Fruit's WACC is 12.3%. Now Executive Fruit is considering an investment in geothermal power production. a. Should it discount project cash flows at 12.3%? b. What would be a better discount rate for this investment? Note: Enter your answer as a percent rounded to 1 decimal place. a. Should it discount project cash flows at 12.3%? b. Better discount rate %
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