5. Problem 10.05 Click here to read the eBook: An Overview of the Weighted Average...

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5. Problem 10.05 Click here to read the eBook: An Overview of the Weighted Average Cost of Capital (WACC) PROJECT SELECTION Midwest Water Works estimates that its WACC is 10.44%. The company is considering the following capital budgeting projects. Assume that each of these projects is just as risky as the firm's existing assets and that the firm may accept all the projects or only some of them. Which set of projects should be accepted? Project Size Rate of Return A 12.0% B 11.5 $1 million 2 million 2 million 2 million 1 million -Select- Accept Don't accept -Select- 11.2 11.0 -Select- 0 0 0 0 10.7 -Select- F 1 million 10.3 -Select- 1 million 10.2 -Select

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