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stranahan stranahan
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7 years ago
Krile Industries has three projects under consideration. Project L is a lower-than-average-risk project, project A is an average-risk project, and project H is a higher-than-average-risk project. You have gathered the following information to determine if one or more of these projects has an acceptable rate of return for the firm.

•   Sources of financing 50% debt and 50% equity
•   Rd = 8.00% before taxes
•   Tax Rate = 30%
•   Average beta for Krile Industries = 1.0
•   Rm = 13.00%
•   Rf = 4.00%
•   Adjusted WACC = 9.30%
•   Beta for project L = 0.80, for project A = 1.00, and for project H = 1.20
•   IRRL = 9.00%, IRRA = 10.00%, and IRRH = 11.00%

Calculate the required rate of return for each project and determine which, if any, projects are acceptable to the firm.
Textbook 
Financial Management: Core Concepts

Financial Management: Core Concepts


Edition: 2nd
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UnluckyGirlXOXUnluckyGirlXOX
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stranahan Author
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7 years ago
Thanks Smiling Face with Open Mouth and Tightly-closed Eyes
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