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An all-equity firm is considering the following projects: Project Beta IRR W 0.80 9.4% X .95 10.9% Y 1.15 13.0% Z 1.45 14.2% The firms

An all-equity firm is considering the following projects:

Project Beta IRR

W 0.80 9.4%

X .95 10.9%

Y 1.15 13.0%

Z 1.45 14.2%

The firms overall cost of capital is 11%. Assume T -bill rate is 3.5 percent, and the expected return on the market is 11 percent.

a. Which projects should be accepted? And Why?

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