Projects for both firms have an estimated rate of return

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Reference no: EM13810836

Northern Boat Mfg., Inc. has a weighted average cost of capital (WACC) of 16.8 percent, given the firm’s current boat-making operations. Home Builders, Inc. has a WACC of 14.4 percent, given that the firm builds new, single-family homes. Both firms are considering projects that would entail the construction of new, suburban, single-family homes. The projects for both firms have an estimated rate of return of 15.9 percent. Which firm(s), if either, should accept their building project?

A .neither firm

B. Home Builder’s, Inc. only

C. both firms

D. Northern Boat Mfg. Only

Reference no: EM13810836

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