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Vang Enterprises,which Is Debt-Free and Finances Only with Equity from Retained

Question 93

Multiple Choice

Vang Enterprises,which is debt-free and finances only with equity from retained earnings,is considering 7 equal-sized capital budgeting projects.Its CFO hired you to assist in deciding whether none,some,or all of the projects should be accepted.You have the following information: rRF = 4.50%; RPM = 5.50%; and b = 0.92.The company adds or subtracts a specified percentage to the corporate WACC when it evaluates projects that have above- or below-average risk.Data on the 7 projects are shown below.If these are the only projects under consideration,how large should the capital budget be?
Vang Enterprises,which is debt-free and finances only with equity from retained earnings,is considering 7 equal-sized capital budgeting projects.Its CFO hired you to assist in deciding whether none,some,or all of the projects should be accepted.You have the following information: r<sub>RF</sub> = 4.50%; RP<sub>M</sub> = 5.50%; and b = 0.92.The company adds or subtracts a specified percentage to the corporate WACC when it evaluates projects that have above- or below-average risk.Data on the 7 projects are shown below.If these are the only projects under consideration,how large should the capital budget be?   A) $100 B) $ 75 C) $ 50 D) $ 25 E) $ 0


A) $100
B) $ 75
C) $ 50
D) $ 25
E) $ 0

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