ABC Inc. has a WACC of 8% and is presented with a normal project (with the same risk as the firm's overall operations) with an internal rate of return of 10%, should it accept the project? A. No; The IRR of the project is greater than the project cost of capital. B. Yes; The IRR of the project is less than the project cost of capital. C. No; The IRR of the project is less than the project cost of capital. D. Yes; The IRR of the project is greater than the project cost of capital.

ABC Inc. has a WACC of 8% and is presented with a normal project (with the same risk as the firm's overall operations) with an internal rate of return of 10%, should it accept the project? A. No; The IRR of the project is greater than the project cost of capital. B. Yes; The IRR of the project is less than the project cost of capital. C. No; The IRR of the project is less than the project cost of capital. D. Yes; The IRR of the project is greater than the project cost of capital.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter11: Capital Budgeting And Risk

Section: Chapter Questions

Problem 19P

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