Question: LaPango Inc. estimates that its average-risk projects have a WACC of 10%, its below-average risk projects have a WACC of 8%, and its above-average risk

LaPango Inc. estimates that its average-risk projects have a WACC of 10%, its below-average risk projects have a WACC of 8%, and its above-average risk projects have a WACC of 12%. Which of the following projects (A, B, and C) should the company accept?

A) Project B, which is of below-average risk and has a return of 8.5%.

B) All of the projects (A, B and C).

C) Project A, which is of average risk and has a return of 9%.

D) None of the projects.

E) Project C, which is of above-average risk and has a return of 11%.

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