Question
A firm is considering the following four independent projects: Beta IRR Project 1 1.4 18.0% Project 2 0.8 9.0% Project 3 0.6 10.0% Project 4
A firm is considering the following four independent projects:
| Beta | IRR | |
| Project 1 | 1.4 | 18.0% |
| Project 2 | 0.8 | 9.0% |
| Project 3 | 0.6 | 10.0% |
| Project 4 | 2 | 20.0% |
The risk-free rate is 2%, the expected market return is 12%. The firm's WACC is 8%. Which of the following statements is correct (true)?
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Accept only project 1
|
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|
Accept only projects 1 and 3
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|
|
Reject all projects
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|
|
Accept only projects 2 and 3
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Accept all projects
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Accept projects 1 and 2
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Reject only project 3
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Reject only project 1
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Understanding financial statements
Authors: Lyn M. Fraser, Aileen Ormiston
9th Edition
136086241, 978-0136086246
