Company uses the npv method when choosing projects

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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?

Answer is either:

a) Project A, which has average risk and an IRR = 9%.

b) Project B, which has below-average risk and an IRR = 8.5%.

c) Project C, which has above-average risk and an IRR = 11%.

d) Without information about the projects' NPVs we cannot determine which project(s) should be accepted.

e) All of these projects should be accepted.

Reference no: EM131461314

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