Which of the following projects should the firm accept

Reference no: EM13263812

Duval Inc. uses only equity capital, and it has two equally-sized divisions. Division A's cost of capital is 10.0%, Division B's cost is 14.0%, and the corporate (composite) WACC is 12.0%. All of Division A's projects are equally risky, as are all of Division B's projects. However, the projects of Division A are less risky than those of Division B. Which of the following projects should the firm accept?

A Division B project with a 13% return.
A Division B project with a 12% return.
A Division A project with an 11% return.
A Division A project with a 9% return.
A Division B project with an 11% return

Reference no: EM13263812

Questions Cloud

Find the location magnitude and sign of the third charge : Two free point charges +q and +4q are a distance l apart. Find the location, magnitude, and sign of the third charge

What would be the expected return and risk : Using the following information, find the Expected Return, Variance, and Standard Deviation for the returns on Stock 1 and Stock 2. Also, find the Covariance and Correlation Coefficient between the returns on Stocks 1 and 2.

What is the projects net present value : The project's WACC is 10.5%. What is the project's net present value (NPV)? What is the IRR? Should the project be accepted? Why or why not?

What is the height of the pulse that returns : A rope of length L = 5.2 m with a total mass of m = 0.205 kg is tied to a hook rigidly mounted into a wall. What is the height of the pulse that returns

Which of the following projects should the firm accept : All of Division A's projects are equally risky, as are all of Division B's projects. However, the projects of Division A are less risky than those of Division B. Which of the following projects should the firm accept?

Find the duration of the plans obligations : A pension plan is obligated to make disbursements of $3.0 million, $3.8 million, and $3.0 million at the end of each of the next three years, respectively. Find the duration of the plan's obligations if the interest rate is 9% annually.

What does the p-value in your spss output tell you : Produce the scatter plot for x3 and y3. Do you think there are any outliers?Calculate the correlation coefficient (r) for all the data points What does the p-value in your SPSS output tell you?

What is the torsion constant of the hairspring : A certain alarm clock ticks four times each second, with each tick representing half a period. What is the torsion constant of the hairspring

Which stock should this investor add to his or her portfolio : However, Stock A's standard deviation of returns is 12% versus 8% for Stock B. Which stock should this investor add to his or her portfolio, or does the choice not matter?

User Account

All Pages