An all-equity firm is considering the following projects:

Project Beta IRR
W .67 9.5 %
X .74 10.6
Y 1.37 14.1
Z 1.48 17.1

The T-bill rate is 5.1 percent, and the expected return on the market is 12.1 percent.

a. Compared with the firm's 12.1 percent cost of capital, Project W has a (lower or higher) expected return, Project X has a (lower or higher) expected return, Project Y has a (lower or higher) expected return, and Project Z has a (higher or lower) expected return.

b.

Project W should be (rejected or accepted), Project X should be (rejected or accepted), Project Y should be (rejected or accepted), and Project Z should be(rejected or accepted).

c.

If the firm's overall cost of capital were used as a hurdle rate, Project W would be (correctly rejected or correctly accepted or incorrectly rejected or correctly accepted), Project X would be (correctly rejected or correctly accepted or incorrectly rejected or correctly accepted), Project Y would be (correctly rejected or correctly accepted or incorrectly rejected or correctly accepted), and Project Z would be (correctly rejected or correctly accepted or incorrectly rejected or correctly accepted)