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Solar Solutions and Natural Services are two different firms both considering a new solar development project. Solar is in the solar energy business and has
Solar Solutions and Natural Services are two different firms both considering a new solar development project. Solar is in the solar energy business and has a weighted average cost of capital (WACC) of 8%. Natural Services provides zero waste solutions for businesses and has a WACC of 14%. The solar project has initial costs of $800,000 and annual cash inflows of $190,000 per year for 6 years. Which firm(s), if either, should accept the project?
A) Solar Solutions only
B) Natural Services only
C) Both firms
D) Neither firm
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