RATE OF RETURN 2245

XYZ Industries has three projects under consideration. Project L is a lower-than-average-risk project, project A is an average-risk project, and project H is a higher-than-average-risk project. You have gathered the following information to determine if one or more of these projects has an acceptable rate of return for the firm.
•	Sources of financing 50% debt and 50% equity
•	Rd = 7.00% before taxes
•	Tax Rate = 30%
•	Average beta for XYZ Industries = 1.5
•	Rm = 12.00%
•	Rf = 3.75%
•	Adjusted WACC = 10%
•	Beta for project L = 0.80, for project A = 1.00, and for project H = 1.20
•	IRRL = 9.00%, IRRA = 10.00%, and IRRH = 11.00%

Calculate the required rate of return for each project and determine which, if any, projects are acceptable to the firm.