Evaluated projects using the firms average discount rate

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A colleague has evaluated projects using the firm's average discount rate, which is the discount rate on the average risk project of the firm. He produced the following report:

Project NPV IRR Risk

A (800) 9.5% Average

B (450) 10.0% Low

C $1500 12.5% High

D 0 11.0% Low

If a project has a risk that is different from average, your firm usually adjusts the discount rate by adding or subtracting 2 percentage points. Suppose the four projects listed below are independent. Which project (s), you should choose and then why?

Reference no: EM13724245

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