Question
Lets say Walgreens had a WACC of 11%. The mom and pop pharmacies they are planning to undertake would provide an IRR of 15% but
Lets say Walgreens had a WACC of 11%. The mom and pop pharmacies they are planning to undertake would provide an IRR of 15% but you do not think that this project is a good investment for Walgreens. What logical argument would you use to persuade Walgreens to decline the project despite the high rate of return?
- Recommend whether or not the company should expand, and defend your position.
first figure out and understand what WACC is. After you understand what that is then you can come up with the IRR and explain what your company should do and why?
If the WACC and rate of return were within 1- 3% of each other what would your recommendation be? At what rate of return would your response be to reject the project?
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