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Profitable and unprofitable projects as the wacc rises

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Reference no: EM131624751

Given the following information:

Project        Cost          IRR

A                  1M            5%

B                   4              22

C                 10              11

D                 10              13

E                  5                 9

F                 15                 6

G                10               14

H                20                 4

The company can borrow the capital at 5% up to 25 million dollars, whereas just beyond 25 million dollars the WACC jumps to 5.5%.

Show the cutoff between profitable and unprofitable projects as the WACC rises.

Reference no: EM131624751

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