11.14

If the WACC rose to 15% would this affect your recommendation? 1, when the WACC increases to 15%, the IRR for LCC is greater than the IRR for HCC, LCC would be chosen. 11. When the WACC increases to 15%, the IRR for HCC is greater than the IRR for LCC, HCC would be chosen. III. Since all of the cash flows are negative, the NPV's will be negative and we do not accept any project that has a negative NPV . When the WACC increases to 15%, the NPV of costs are now lower for LCC than HCC. V. When the WACC increases to 15%, the NPV of costs are now lower for HCC than LCC. -Select Explain your answer and the reason this result occurred. I. The reason is that when you discount at a higher rate you are making negative CFs higher thus improving the IRR. II. The reason is that when you discount at a higher rate you are making negative CFs higher thus improving the NPV III. The reason is that when you discount at a higher rate you are making negative CFs higher and this lowers the NPV IV. The reason is that when you discount at a higher rate you are making negative CFs smaller and this lowers the NPV V. The reason is that when you discount at a higher rate you are making negative CFs smaller thus improving the NPv