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Kenforest Grocers' managers are determining the company's optimal capital budget for the next year. Kenforest is considering the following projects:' Project Size Return Risk A

Kenforest Grocers' managers are determining the company's optimal capital budget for the next year. Kenforest is considering the following projects:'

Project

Size

Return

Risk

A

$200,000

16%

High

B

500,000

14

Average

C

400,000

12

Low

D

300,000

11

High

E

100,000

10

Average

F

200,000

10

Low

G

400,000

7

Low

The company estimates that its WACC is 11%. All projects are independent. The company adjusts for risk by adding 2% to the WACC for high-risk projects and subtracting 2% from the WACC for low-risk projects. Which of the projects will the company accept?

A, B, C, E, F

B, D, F, G

A, B, C, E

A, B, C, D, E

A, B, C, F

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