The NRDC has traditionally employed a firm wide discount rate for capital budgeting purposes. However, its two divisions - publishing and entertainment - have different degrees of risk given by BP = 1.2, BE = 2.2, and the beta for the overall firm is 1.7. The firm is considering the following capital expenditures: Proposed Project Initial Investment IRR P 1 $1M .153 Publishing P2 $2M .165 P3 $4M .065 E 1 $6M .198 Entertainment E2 $4M .153 E3 $8M .121 Use 4% as the risk-free rate and 10% as the expected return on the market. What is the cost of capital for the entire company? Which projects would the firm accept if it uses cost of capital for the entire company? Is the firm's overall cost of capital an appropriate benchmark to evaluate each division? O 16%; accept P2 and E1; No. O 11.2%; accept projects P1, P2: Yes 14.2%; accept projects E1, E2, P1, P2; No.No. O 17.2%; accept E1; Yes