$13$

Swanson & Sons has two separate divisions. Each division is in a separate line of business. Division $A$ is the largest division and represents $65\%$ of the firm's overall sales. Division $A$ is also the riskier of the two divisions. Division B is the smaller and least risky of the two. When the company is deciding which of the various divisional projects should be accepted, they should:

$1$

points

Multiple Choice

eBook

Fund all of Division B$\text{'}$s projects first since they tend to be less risky and then allocate the remaining funds to the Division A projects that have the highest net present values.

Allocate the company funds to the projects with the highest net present values based on the firm's weighted average cost of capital.

fund the highest net present value projects from each division based on an allocation of $65\%$ of the funds to Division A and $35\%$ of the funds to Division B$.$

$$ Assign different discount rates to each project and then select the projects with the highest net present values.