Which project should the company accept

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Question - FHC Industries is evaluating three mutually exclusive projects. FHC calculated the net present value for each of the three projects using the company's weighted average cost of capital as the discount rate. Project A has a negative net present value. Project B and Project C both have the same net present value, although Project C is much riskier than Project B. Which project should the company accept?

The company should accept both Project B and Project C because they both have the same net present value.

The company should accept Project C because it is riskier and likely to have a higher net present value than the one calculated by the company.

The company is indifferent between Project B and Project C because they both have the same net present value.

The company should accept Project B because it is less risky than Project C even though they both have the same net present value.

Reference no: EM133040321

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