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Once computing the weighted avrg cost of capital, which project(s) should be accepted
For example, A business can buy a piece of equipment that is anticipated to provide an 8 percent return and can be financed at 5 percent with debt. But later in the year, the firm turns down an opportunity to buy a new machine that would yield a 15 percent return but would cost 17 percent to finance through common equity. Assume debt and common equity each represent 50 percent of the firm's capital structure. What is the weighted average cost of capital and which project(s) should be accepted.
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