Vang IncEstimates That Its Average-Risk Projects Have a WACC of 10%,its

question 72

Multiple Choice

Vang Inc.estimates that its average-risk projects have a WACC of 10%,its below-average risk projects have a WACC of 8%,and its above-average risk projects have a WACC of 12%.Which project (A,B,C,or D) should the company accept?

• A)Project B is of below-average risk and has a return of 8.5%.
• B)Project C is of above-average risk and has a return of 11%.
• C)Project A is of average risk and has a return of 9%.
• D)Project A has a below-average risk and has a return of 7.5%.

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