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Suppose Tapley Inc. uses a WACC of 8% for below-average risk projects, 10% for av...continues

Suppose Tapley Inc. uses a WACC of 8% for below-average risk projects, 10% for average-risk projects, and 12% for above-average risk projects. Which of the followingindependent projects should Tapley accept, assuming that the company uses the NPV method when choosing projects?a.Project A, which has average risk and an IRR = 9%.b.Project B, which has below-average risk and an IRR = 8.5%.c.Project C, which has above-average risk and an IRR = 11%.d.Without information about the projects' NPVs we cannot determine which one or ones should be accepted.e.All of these projects should be accepted.
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Answer #1
for independent projects the only requirement to get accepted is that req rate of return < IRR....the only one which meets this condition is project B(the below avg risk project)
answered by: Billie Jo
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Answer #2
The answer is B


Hope this helps
answered by: life-line
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