Two Independent Projects Analysis Assignment | Homework For You
June 3rd, 2020
Birch Corporation, a multi-divisional firm funded by 100% equity, is considering the following two independent projects. The risk-free rate is 3%, and the expected return on the market is 9%. The company’s overall cost of capital is 10%. The two projects are:

0) Project X in a low risk division has an equity beta of 0.9 and an expected IRR of 7.0%
(ii) Project Y in a high risk division has an equity beta of 1.6 and an expected IRR of 11.4%. Which project should be accepted?
O A. Only X should be accepted
O B. Only Y should be accepted
O C. Both projects should be accepted
O D. Neither project should be accepted. Get Finance homework help today