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You are the manager of a firm and have to decide whether or not to undertake the following project. The project has an internal rate
You are the manager of a firm and have to decide whether or not to undertake the following project. The project has an internal rate of return (IRR) of 10%. Your company's beta is 0.5, the expected market return is .10 and the risk-free rate is zero. Which is the correct decision? Don't undertake the project because the cost of capital is greater than the IRR of the project. Undertake the project because the IRR of the project is greater than the cost of capital. Don't undertake the project because the cost of capital is lower than the IRR of the project. Undertake the project because the IRR of the project is lower than the cost of capital
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