WACC-Book weights Ridge Tool has on its books the amounts and specific (after-tax) costs shown in the following table for each source of capital: a. Calculate the firm's weighted average cost of capital using book value weights. b. Explain how the firm can use this cost in the investment decision-making process. a. The firm's weighted average cost of capital, r'a, using book value weights is %. (Round to two decimal places.) b. Explain how the firm can use this cost in the investment decision-making process. (Select the best answer below.) A. The WACC is the rate of return that the firm must not exceed on long-term projects to maintain the value of the firm. The cost of capital can be compared to the return for a project to determine whether the project is acceptable. B. The WACC is the rate of return that the firm must receive on short-term projects to maintain the value of the firm. The cost of capital can be compared to the dollar value for a project to determine whether the project is acceptable. C. The WACC is the rate of return that the firm must receive on long-term projects to maintain the value of the firm. The cost of capital be compared to the return for a project to determine whether the project is acc able. D. The WACC is the rate of return that the firm must exceed on long-term projects to maintain the value of the firm. The cost of capital can be compared to the dollar value for a project to determine whether the project is acceptable. i Data Table (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Source of capital Long-term debt Preferred stock Common stock equity Book value $950,000 $40,000 $550,000 Individual cost o 7.4% 11.5% 14.4%