Question
Duvall Inc. uses only equity capital and has two equally sized divisions. Division As cost of capital is 10%. Division Bs cost of capital is
Duvall Inc. uses only equity capital and has two equally sized divisions. Division As cost of capital is 10%. Division Bs cost of capital is 14%. The WACC is 12%. All of Division As projects are equally risky, as are all of Division Bs projects. However, the projects of Division A are less risky than those of Division B. Which of the following would the company accept?
Harrys Inc. is considering a project that has the following cash flow and WACC data. What is the projects NPV and IRR? WACC 14.75% Year 0 1 2 3 4 5 Cash flows -$1,000 $300 $300 $300 $300
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