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Strathcona Inc. uses a WACC of 6% for below-average risk projects, 9% for average risk projects, and 12% for above-average risk projects. Which independent project
Strathcona Inc. uses a WACC of 6% for below-average risk projects, 9% for average risk projects, and 12% for above-average risk projects. Which independent project should Strathcona Inc. accept? a. Without information about the projects' NPVs we cannot determine which one(s) should be accepted. b. Project C, which has above-average risk and an IRR of 11% c. Project A, which has average risk and an IRR of 9.2% d. Project B, which has below-average risk and an IRR of 5.5%
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