You are evaluating the following four projects: ProjectBetaProjected (or Expected) ReturnA1.8018.0%B1.2016.8%C1.0011.5%D0.509.5%Your company's current practice is to...
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Accounting
You are evaluating the following four projects:
| Project | Beta | Projected (or Expected) Return |
| A | 1.80 | 18.0% |
| B | 1.20 | 16.8% |
| C | 1.00 | 11.5% |
| D | 0.50 | 9.5% |
Your company's current practice is to apply its WACC of 12% as a single hurdle rate to all projects. Under your company's current practice, which project(s) of the four projects above would be incorrectly accepted? Currently, the 3-month Treasury bill rate is 3%, and the market risk premium is 10%.
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