Suppose Tapley Corporation Uses a WACC of 8% for Below-Average

question 32

Multiple Choice

Suppose Tapley Corporation uses a WACC of 8% for below-average risk projects,10% for average risk projects,and 12% for above-average risk projects.Which independent project should Tapley accept,assuming that the company uses the NPV method when choosing projects?

• A)Project A, which has average risk and an IRR of 9%
• B)Project B, which has below-average risk and an IRR of 8.5%
• C)Project C, which has above-average risk and an IRR of 11%
• D)Without information about the projects' NPVs we cannot determine which one(s) should be accepted