Compute the weighted average

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Speedy Delivery can buy a piece of equipment that is anticipated to provide an 11% return and can be financed at 6% with debt. Later in the year, the firm turns down an opportunity to buy a new machine that would yield a 9% return but would cost 15% to finance through common equity. Assume debt and common equity each represent 50% of firms capital structure.

Compute the weighted average and which project should be accepted?

Reference no: EM131487156

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