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Show work on how to solve, thanks Which of the projects will the company accept? (a) No budget limitation (b) subject to budget Project Required
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Which of the projects will the company accept? (a) No budget limitation (b) subject to budget Project Required investment (in millions) Rate of Return Risk-adjusted WACC Excess Return Ranking Available Capital Ranking $300 16.0% B 400 15.5 400 12.0 D 100 11.7 E 100 10.0 F 200 9.0 G 350 8.5 Except for projects F and G are mutually exclusive, all the other projects are independent . Projects A and C are high-risk projects, projects B and E are average-risk projects, while projects D, F, and G are low-risk projects. The company estimates that its WACC is 9%. The company adjusts for risk by adding 3 percentage points to the WACC for high-risk projects and subtracting 3 percentage points from the WACC for low-risk projects. The company has a limited capital budget of $900. Select one: O a. A BF O b. B, D G O c. B, C, E O d. A, B, D, E O e. B, C, E, FStep by Step Solution
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