Question: the capital budgeting manager of conscientious company submitted the following...
The capital budgeting manager of conscientious company submitted the following report to the CFO:
Project. IRR. RISK
A. 9%. Low
B. 10%. Average
C. 12%. High
CCC generally takes risk into consideration by adjusting its average required rate of return, which equals 8%, when evaluating projects with risk that are either substantially higher than average. A 5% adjustment is made for high-risk projects, and a 2% adjustment is made for low-risk projects. If the above projects are independent, which projects should CCC purchase?