Question: A company estimates that an average-risk project has a WACC of 9%, a below-average risk project has a 7% cost of capital, and an above-average risk project has an 11% cost of capital. Which of the following projects should the company accept?
a. Project A which has average risk and an IRR of 9.5%
b. Project B which has below-average risk and an IRR of 6.35%
c. Project C which has above-average risk and an IRR of 10.5%
d. All of the projects are acceptable