Peter Pipers Pies (P 3 ) is evaluating four independent investments The cost of each project is $214,000 The internal rates of return (IRRs) for the projects are IRR 1 19 , IRR 2 15 , IRR 3 18 , and IRR 4 14 P 3 s investment banker has provided the following WACC table Total Amount Raised WACC $ 1 ...

The WACCs are Using these WACCs the following table ...

Peter Pipers Pies (P 3 ) is evaluating four independent investments. The cost of each project is

Question:

Peter Piper’s Pies (P³) is evaluating four independent investments. The cost of each project is $214,000. The internal rates of return (IRRs) for the projects are IRR₁ = 19%, IRR₂ = 15%, IRR₃ = 18%, and IRR₄ = 14%. P³’s investment banker has provided the following WACC table:

Total Amount Raised WACC
$ 1 – $520,000 .................................. 11.0%
520,001 – 745,000 ........................... 12.5
Over 745,000 ................................... 15.2

Which project(s) should P³ purchase?

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