In October 2013, Road Runner Garage Inc. bought a welding machine that provided a return of 10%. It was financed using debt with an after tax cost of 8%. In November 2013 they developed a turbocharged V8 Engine that would return 15%. The Chief Financial Officer thinks the V8 Engine project would be impractical because in order to finance the project it would require the issuance of common stock at a cost of 17%. Road Runner and its Chief Financial Officer:

	A.	Understand the concept of when and how to us the Weighted average Cost of Capital
	B.	Do not understand the concept of when and how to use the Weighted Average Cost of Capital
	C.	Are correct in both cases, accept the welding machine purchase and reject the V8 engine.
	D.	Approve both projects.