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Bloom and Co.has no debt or preferred stock⎯it uses only equity capital, and has two equally-sized divisions.Division X's cost of capital is 10.0%, Division Y's cost is 14.0%, and the corporate (composite) WACC is 12.0%.All of Division X's projects are equally risky, as are all of Division Y's projects.However, the projects of Division X are less risky than those of Division Y.Which of the following projects should the firm accept?
Absolute Advantage
The ability of an entity to produce more of a good or service with the same amount of resources, or the same amount of a good or service with fewer resources, than competitors.
Opportunity Cost
The cost associated with not pursuing an alternative option when a decision is made, reflecting the trade-offs inherent in decision-making.
Summer School
Educational programs or classes offered during the summer vacation period to provide additional learning opportunities.
Full-Time
Employment status where individuals work a minimum number of hours defined by their employer or national regulations, usually around 40 hours per week.
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