An all-equity firm is considering the following projects:

Project Beta IRR

W .75 10.4%

X .74 10.7%

Y 1.33 14.2%

Z 1.66 17.3%

The T-bill rate is 5.3 percent, and the expected return on the market is 12.3 percent.

Required:
(a)	Which projects have a higher expected return than the firms 12.3 percent cost of capital?
	Project W has a (Click to select)lowerhigher expected return, Project X has a (Click to select)lowerhigher expected return, Project Y has a (Click to select)higherlower expected return, and Project Z has a (Click to select)lowerhigherexpected return.

(b)	Which projects should be accepted?
	Project W should be (Click to select)acceptedrejected, Project X should be (Click to select)rejectedaccepted, Project Y should be (Click to select)rejectedaccepted, and Project Z should be (Click to select)acceptedrejected.

(c)	Which projects will be incorrectly accepted/rejected or correctly accepted/rejected if the firm's overall cost of capital were used as a hurdle rate?
	Project W would be (Click to select)incorrectly rejectedcorrectly acceptedincorrectly rejectedcorrectly rejected, Project X would be (Click to select)correctly acceptedincorrectly rejectedincorrectly rejectedcorrectly rejected, Project Y would be (Click to select)correctly acceptedincorrectly rejectedcorrectly rejectedincorrectly rejected, and Project Z would be (Click to select)correctly acceptedincorrectly rejectedincorrectly rejectedcorrectly rejected.