The cost of capital reflects the cost of financing new projects/investments for a company. As of January 2020 the cost of capital for an average company in the Entertainment industry was 7.83%. In other words, for every $100 raised through all sources of financing, $7.83 goes to pay returns to bondholders, stockholders, and preferred stockholders (if there are any).

Assume that the NBC Universal company has the average cost of capital and has the following prospective projects: Project A - Invest in building new studio facilities in southeastern U.S. with an estimated rate of return of 9%; Project B - Acquisition of a Lighting Technology company with an estimated rate of return of 10%; and Project C - Purchase of a small film company with an estimated rate of return of 6%.

Discuss the accept/reject decision process of the NBC Universal capital budgeting analyst in terms of both risk and return of these projects.