Company A has WACC 10%. The firm follows a policy of adding or subtracting 3% to adjust for the risk of projects (classified as average, high, and low risk). Which of these mutually exclusive projects would you accept under this policy?

Company A has WACC 10%. The firm follows a policy of adding or subtracting 3% to adjust for the risk of projects (classified as average, high, and low risk). Which of these mutually exclusive projects would you accept under this policy?

Project A Project B Project C

(low risk) (high risk) (average risk)

CFO -50 -120 -75

CF1 65 150 100

CF2 30 175 100

CF3 25 190 100

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