Suppose Tapley Inc. uses a WACC of 8% for below-average risk projects, 10% for average-risk projects, and 12% for above-average risk projects. Which of the following independent projects should Tapley accept, assuming that the company uses the NPV method when choosing projects? Group of answer choices Project A, which has average risk and an IRR = 9%. Project C, which has above-average risk and an IRR = 11%. Project B, which has below-average risk and an IRR = 8.5%. All of these projects should be accepted. Without information about the projects' NPVs we cannot determine which project(s) should be accepted.
Suppose Tapley Inc. uses a WACC of 8% for below-average risk projects, 10% for average-risk projects, and 12% for above-average risk projects. Which of the following independent projects should Tapley accept, assuming that the company uses the NPV method when choosing projects? Group of answer choices Project A, which has average risk and an IRR = 9%. Project C, which has above-average risk and an IRR = 11%. Project B, which has below-average risk and an IRR = 8.5%. All of these projects should be accepted. Without information about the projects' NPVs we cannot determine which project(s) should be accepted.
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
Problem 1PS
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Suppose Tapley Inc. uses a WACC of 8% for below-average risk projects, 10% for average-risk projects, and 12% for above-average risk projects. Which of the following independent projects should Tapley accept, assuming that the company uses the NPV method when choosing projects?
Group of answer choices
Project A, which has average risk and an IRR = 9%.
Project C, which has above-average risk and an IRR = 11%.
Project B, which has below-average risk and an IRR = 8.5%.
All of these projects should be accepted.
Without information about the projects' NPVs we cannot determine which project(s) should be accepted.
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