Puckett Inc. risk-adjusts its WACC to account for project risk. It uses a WACC of 8% for below-average risk projects, 10% for average-risk projects, and 12% for above-average risk projects. Which of the following independent projects should Puckett accept, assuming that the company uses the NPV method when choosing projects?

A. Without information about the projects' NPVs we cannot determine which project(s) should be accepted

B. project B, which has below-average risk and an IRR = 8.5%.

C. Project C, which has above-average risk and an IRR = 11%.

D. All of these projects should be accepted.

E. Project A, which has average risk and an IRR = 9%.

Answer rating: 100% (QA)

Project B which has below avera... View the full answer