The firm is considering two projects A and B. Both projects have conventional cash flows. Project A has beta of 1.0 and it has an IRR (promised return) of 13.0%. Project B has a beta of 1.5 and it has an IRR of 15.0%. If the risk-free rate is 5.25% and the market risk premium is 7.0%, which project(s) should the firm take?
Answer: Project A
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