Anderson Animations Corporation should ( ACCEPT/ REJECT) the Division Ls project because its return is (Greater than/ Less than/ the same as) the risk-based cost of capital for the division.

The impact of cost of capital on managerial decisions Anderson Animations Corporation has two divisions, L and H. Division L is the company's low-risk division and would have a weighted average cost of capital of 8% if it was operated as an independent company. Division H is the company's high-risk division and would have a weighted average cost of capital of 14% if it was operated as an independent company. Because the two divisions are the same size, the company has a composite weighted average cost of capital of 11%. Division L is considering a project with an expected return of 9.5%. Anderson Animations Corporation should the Division L's project because its return is the risk-based cost of capital for the division