Profitable and unprofitable projects as the wacc rises

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Reference no: EM131628163

Given the following information:

Project        Cost        IRR            

A              1M            5%          

B              4               22              

C            10                11

D            10               13               

E             5                  9      

F            15                  6                           

G           10                14                        

H           20                  4  

The company can borrow the capital at 5% up to 25 million dollars, whereas just beyond 25 million dollars the WACC jumps to 5.5%.

Show the cutoff between profitable and unprofitable projects as the WACC rises.

Reference no: EM131628163

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