Takelmer Industries has a different WACC for each of three types of pr

Takelmer Industries has a different WACC for each of three types of projects. Low-risk projects have a WACC of 8.00%, average-risk projects a WACC of 10.00%, and high-risk projects a WACC of 12%.

Which of the following projects do you recommend the firm accept?

Project Level of Risk IRR
A Low 9.50%
B Average 8.50%
C Average 7.50%
D Low 9.50%
E High 14.50%
F High 17.50%
G Average 11.50%

A) A, B, C, D, G
B) B, C, E, F, G
C) A, D, E, F, G,
D) A, B, C, D, E, F, G

ANSWER

Answer: C