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A company provides you with the following estimates: Below-Average Risk projects WACC = 8% Average-Risk projects WACC = 10% Above-average risk projects WACC = 12%

A company provides you with the following estimates:

Below-Average Risk projects WACC = 8%

Average-Risk projects WACC = 10%

Above-average risk projects WACC = 12%

Which of the following independent projects should the company accept?

a. Project A has below-average risk and an IRR = 7.75%.

b. Project B has average risk and an IRR = 10.75%.

c. Project C has above-average risk and an IRR = 11.75%.

d. Both Project B and Project C should be accepted.

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