Lafarge Inc. estimates that its average-risk projects have a WACC of 10%, its below-average risk projects have a WACC of 8%, and its above-average risk projects have a WACC of 12%. Which of the following projects (A, B, and C) should the company accept?
a. Project B, which is of below-average risk and has a return of 8.5%.
b. Project C, which is of above-average risk and has a return of 11%.
c. Project A, which is of average risk and has a return of 9%.
d. None of the projects should be accepted.
e. All of the projects should be accepted.
1. Project B, which is of below-average risk and has a return of 8.5%
2. Project C, which is of above-average risk and has a return of 11%.
3. Project A, which is of average risk and has a return of 9%
4. None of the projects should be accepted
5. All of the projects should be accepted