An all-equity firm is considering the following projects:

Project Beta IRR

A 0.75 8.4%

B 0.95. 12.6%

C 1.15 13.5%

D 1.32 14.5%

E 1.45 15.9%

The T-bill rate is 3 percent, and the expected return on the market is 12 percent.

a. Which projects have a higher expected return than the firms 13 percent cost of capital?

( b. Which projects should be accepted?