18. A firm is considering two mutually exclusive projects with equal lives: Project A has an NPV of $100,000, an IRR of 12%, and a payback period of 3.1 years. Project B has an NPV of $120,000, an IRR of 14%, and a payback period of 2.8 years. The firm should choose a. Project A because its NPV is higher than Project B's b. Project A because its payback period is longer than Project B's c. Project B because its IRR is higher than Project A's d. Project B because its payback period is shorter than Project A's e. Both projects 19. According to the capital asset pricing model (i.e., CAPM), if the risk-free rate of return is 2.5%, the expected return on the market portfolio is 11.5%, and the beta of the stock of ABC, Inc. is 1.57, what is the expected rate of return for the company's stock (rounded to 2 decimal places)? a. 18.25% b. 20.13% c. 16.63% d. 17.63% c. None of the answers listed above is correct. 20. Crimson and Clover has a capital structure of 40% debt and 60% equity. The tax rate is 32%. The firm's bonds currently trade in the market for $784. These face value $1,000 bonds have a coupon rate of 8%, paid semiannually, with 7 years to maturity. The firm's common stock trades for $15 per share. The dividend just paid was $2.00 and future dividends are expected to grow at 6% per year. Crimson and Clover's WACC is a. 14.15 b. 14.60 c. 15.21 d. 15.55 e. 15.86