Providea firm has a wacc of 10 until it has raised 100, Ask an Expert

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A firm has a WACC of 10% until it has raised $100 million. Beyond that the WACC is 12%. The firm has the following projects and associated costs:

Project A has a cost of $50 million and an IRR of 4%; project B has a cost of $70 million and an IRR of 6%; and project C has a cost of $35 million and an IRR of 8%.

Which of these three projects should be rejected? Please provide step by step solution.

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Category:- Basic Finance
Reference No.:- M91145697

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