1. A firm entirely financed with equity capital (i.e. no debt) and a beta equal to 1.0 is considering the following projects;

Project	Beta	IRR
W	0.75	8.90%
X	0.9	10.80%
Y	1.15	12.80%
Z	1.45	13.90%

The risk-free rate is 4% and the expected return on the market is 11%.

1. 1. Which projects have a higher expected return than the firms cost of capital?
   2. Which projects should be accepted?
   3. Which projects would be incorrectly accepted or rejected if the firms overall cost of capital were used as the hurdle rate?