2. A company has three divisions and each division has several available projects as shown below. All of the projects are independent and all have normal cash flows. The company's beta is 1.3, the risk-free rate of interest is 5% per year, and the equity risk premium is 6% per year. The company is financed entirely with equity and its tax rate is 30%. Companies in the same business as division X have an average beta of 1.8, companies in the same business as division Y have an average beta of 1.4, and companies in the same business as division Z have an average beta of 0.8. Which projects should the company pursue? Project Internal rate of return Division A 12.1% Z B 10.3 Y C 16.2 X D 10.4 Z E 13.1 Y F 12.8 X G 11.9 Z H 13.7 Y