Use the wacc for all projects regardless of risk

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Reference no: EM132040623

What would happen if we use the WACC for all projects regardless of risk?

Assume the WACC = 15%

Project Required Return IRR

A 20% 17%

B 15% 18%

C 10% 12%

Which projects would be accepted if they used the WACC for the discount rate? Explain why.

Which projects should be accepted if you use the required return based on the risk of the project? Explain why.

Reference no: EM132040623

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