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You are evaluating the following four projects: Your company's current practice is to apply its WACC of 12% as a single hurdle rate to all
You are evaluating the following four projects: Your company's current practice is to apply its WACC of 12% as a single hurdle rate to all projects. Under your company's current practice, which project(s) of the four projects above would be incorrectly rejected? Currently, the 3-month Treasury bill rate is 3%, and the market risk premium is 10%. (Hint: Measure the RADRs using the CAPM.) A At least two of the projects are incorrectly rejected
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