Question: You work for BurgerInc, & evaluating a project in the firm's beverage division. Should you accept it if the project's IRR (on total investment FCFa)

 You work for BurgerInc, & evaluating a project in the firm's

You work for BurgerInc, & evaluating a project in the firm's beverage division. Should you accept it if the project's IRR (on total investment FCFa) was 13% ? Justify your answer if you estimated the following: -BurgerInc has two divisions (restaurants & beverage) of approximately equal size (by market value). the risk-free rate is 4%, equity-market risk-premium is 6% -BurgerInc can borrow at 5% (an "all-in" interest rate) -BurgerInc's equity beta is 1.4 and its past/current leverage is the same as its target/desired future leverage D/V=20%. MCDinc. is an all-equity "pure play" fast-food firm (comp. to your rest. division), and its stock/asset/unlevered beta is 0.7 -both firms face 30% marginal corporate tax rate

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