Cedar Computer Systems Inc has two projects under consideration and a

Cedar Computer Systems Inc has two projects under consideration and a WACC of 10%. Project Alpha has a hurdle rate of 12% while project Beta has a hurdle rate of 8%.

If project Alpha has an expected return of 11% and project Beta has an expected return of 11%, which project(s), if any, should the firm accept?
A) Project Alpha
B) Project Beta
C) Projects Alpha and Beta
D) Neither project should be accepted.

ANSWER

B