Question: Project Beta IRR W .69 10.3 % X .76 10.8 Y 1.41 14.3 Z 1.52 17.3 c. If the firm's overall cost of capital were

Project	Beta		IRR
W		.69		10.3	%
X		.76		10.8
Y		1.41		14.3
Z		1.52		17.3

If the firm's overall cost of capital were used as a hurdle rate, Project W would be (Click to select)incorrectly acceptedcorrectly acceptedincorrectly rejectedincorrectly rejected, Project X would be (Click to select)incorrectly acceptedcorrectly acceptedincorrectly rejectedincorrectly rejected, Project Y would be (Click to select)incorrectly rejectedcorrectly acceptedincorrectly rejectedincorrectly accepted, and Project Z would be (Click to select)incorrectly rejectedcorrectly acceptedincorrectly rejectedincorrectly accepted.

An all-equity firm is considering the following projects:

Project	Beta		IRR
W		.69		10.3	%
X		.76		10.8
Y		1.41		14.3
Z		1.52		17.3

The T-bill rate is 5.3 percent, and the expected return on the market is 12.3 percent.

Compared with the firm's 12.3 percent cost of capital, Project W has a (Click to select)lowerhigher expected return, Project X has a (Click to select)lowerhigher expected return, Project Y has a (Click to select)lowerhigherexpected return, and Project Z has a (Click to select)lowerhigher expected return.

b.	Project W should be (Click to select)rejectedaccepted, Project X should be (Click to select)rejectedaccepted, Project Y should be (Click to select)rejectedaccepted, and Project Z should be (Click to select)acceptedrejected.

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