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

LaPango Inc. estimates that its average-risk projects have a WACC of 10%,

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? Name Risk Level Expected Return A Average Risk 9% B C Below-Average Risk Above-Average Risk 8.5% 11%

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