1) Based on the data below, complete a risk-adjusted WACC Chart. Indicate if you should accept or reject

Project W : Project Risk is Low; Estimated Life is 10 years; Initial Cost is $25,000; Annual Cash Flow is $6000; Expected Return is 15%

Project X: Project Risk is Average; Estimated Life is 10 years; Initial Cost is $26,000; Annual Cash Flow is $7000; Expected Return is 10%

Project Y: Project Risk is Average; Estimated Life is 10 years; Initial Cost is $20,000; Annual Cash Flow is $5000; Expected Return is 16%

Project Z: Project Risk is High; Estimated Life is 10 years; Initial Cost is $25,000; Annual Cash Flow is $7000; Expected Return is 15%

Project Risk Required Rate of Return

Low 10%

Average 12%

High 20%