Bing Inc. estimates that its average-risk projects have a WACC of 13%, its below-average-risk projects have a WACC of 11%, and its above-average-risk projects have a WACC of 15%. Which project (A, B, C, or D) should the company accept?
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Project A is of below-average risk and has a return of 10%.
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Project B is of above-average risk and has a return of 14%.
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Project C is of average risk and has a return of 13.5%.
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Project D is of above-average risk and has a return of 13.5%.