Company weighted-average cost of capital

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Reference no: EM131608688

Your company's weighted-average cost of capital is 11%. It is planning to undertake a project with an interal rate of return of 14%, but you believe this project is not a wise investment.

A. What logical arguments would you use to convince your boss to forego the project despite its high rate of return?

B. Is it possible that making investments with returns higher than the firm's cost of capital will destroy value? If so, how?

Reference no: EM131608688

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