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Based on its target capital structure, LMV Inc. estimates a WACC of 12% for its average-risk projects, a WACC of 10% for its below-average risk
Based on its target capital structure, LMV Inc. estimates a WACC of 12% for its average-risk projects, a WACC of 10% for its below-average risk projects, and a WACC of 14% for its above-average risk projects. LMV Inc. is choosing between three independent projects. Which of the following projects (A, B, and C) should the company accept? a. Project B, which is of average risk and has a IRR of 11%. b. Project C, which is of below-average risk and has a IRR of 9%. C. All of the projects should be accepted. d. None of the projects should be accepted. e. Project A, which is of above-average risk and has a IRR of 13%
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