1110 capital budgetign criteria exculsive projects a

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11.10/ CAPITAL BUDGETIGN CRITERIA: EXCULSIVE PROJECTS A firm with a WACC of 10% is considering the following mutually exclusive projects: Project A Project B Which project would you recommend? Explain.
capital cost but higher operating costs because it uses more electricity. The costs of the units are shown here. Kim’s WACC is 7%. HCC LCC a. Which unit would you recommend? Explain. b. If Kim’s controller wanted to know the IRRs of the two projects, what would you tell him? c. If the WACC rose to 15% would this affect your recommendation? Explain your answer and the reason this result occurred.

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