The Alphabet Soup Company has a cost of capital of 14%, and it has already accepted all projects that offer at least a 14% return on investments. It has occurred to the CEO that projects earning, say, 6% would still have a positive return and allow the company to grow. Should Alphabet Soup accept projects earning between 6% and 14%, as well as those earning at least 14%? Choose the best answer.

[Note: Assume that all projects have conventional cash flows, with costs up front and benefits later.]

1. Yes, because the projects will have a positive NPV as long as they have a positive expected return (i.e. as long as the IRR is positive).
2. Yes, because taking these projects will maximize shareholder value.
3. Yes, because whether or not these projects maximize shareholder value, they will make society better off by increasing growth.
4. Yes, for all of the reasons given in the various yes answers.
5. No, because those projects would have a negative NPV.