QUESTION 13 Laramie Labs uses a risk-adjustment when evaluating projects of different risk. Its overall (composite) WACC is 10%, which reflects the cost of capital for its average asset. Its assets vary widely in risk, and Laramie evaluates low-risk projects with a WACC of 8%, average-risk projects at 10%, and high-risk projects at 12%. The company is considering the following projects:

Project Risk Expected Return A High 15% B Average 12% C High 11% D Low 9% E Low 6% Which set of projects would maximize shareholder wealth? A and B. A, B, and C. A, B, and D. A, B, C, and D. A, B, C, D, and E. 6.66667 points QUESTION 14 You have just landed an internship in the CFO's office of Hawkesworth Inc. Your first task is to estimate the Year 1 cash flow for a project with the following data. What is the Year 1 cash flow?

Sales revenues $13,000 Depreciation $4,000 Other operating costs $6,000 Tax rate 35.0% $5,950 $6,099 $6,251 $6,407 $6,568