A firm is considering three investment projects which we will refer to as A, B, and C. Each project has an initial?

cost of $10 million. Investment A offers an expected rate of return of16%, B of8%, and C of12%. The firm's cost of capital is6% if it borrows $10 million,10% if it borrows $20 million, and15% if it borrows $30 million. Which project(s) should the firm invest in?

 a. Just A, because it offers the highest rate of return and is the only investment that has a rate of return higher than15% 

 b. All three should be undertaken, because the rate of return on B is above6%, on C is above10%, and on A is above15%. 

 c. Only A and C should be undertaken because both have rates of return that are greater than10%. 

 d. None of the above is correct.