Swizer industries has two separate divisions. Division X has less risk so its projects are assigned a discount rate equal to the firms WACC minus 3 percent. Division Y has more risk and its projects assigned a rate equal to the firms WACC plus 4 percent. The company has a debt equity ratio of .55 and a tax rate of 30 percent. The cost of equity is 15.0 percent and the after-tax cost of debt is 5.0 percent. Presently, each division is considering a new project. Division Ys project provides a 12.0 percent rate of return and division Xs project provides a 7.0 percent return

Given the information in the previous problem, which projects, if any, should the company accept?

You should accept Project X but not Project Y
		You should accept Project Y but not Project X
		You should accept Project Y but you are indifferent about project X
		You should accept neither Project X nor Project Y
		You should accept both Project X and Project Y