PROJECT SELECTION Midwest Water Works estimates that its WACC is 10 5%. The company is considering the

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PROJECT SELECTION Midwest Water Works estimates that its WACC is 10 5%. The company is considering the following capital budgeting projects:

Project Size Rate of Return A $1 million 12.0%

B 2million 11.5 C 2million 11.2 D 2million 11.0 E 1million 10.7 F 1million 10.3 G 1million 10.2 Assume that each of these projects is just as risky as the firm’s existing assets and that the firm may accept all the projects or only some of them. Which set of projects should be accepted? Explain.

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