The smith water company estimates that its wacc is 105

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The Smith Water Company estimates that its WACC is 10.5 percent. The company is considering the following capital budgeting problems.

ProjectSizeRate of Return

A$1 million12.0%

B2 million11.5

C2 million11.2

D2 million11.0

E1 million10.7

F1 million10.3

G1 million10.2

Assume that each of these projects is just as risky as the firm?s existing assets and the firm may accept that all projects or only some of them. Which set of projects should be accepted? Why?

Reference no: EM13485356

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