Answer:
c. A and C only
Step-by-step explanation:
Here is the full question :
Company A has an internal cost of capital of 7% annually. It is evaluating its investment options against its internal costs and has identified three potential investments:
Investment A: Bond with annual returns of 8%
Investment B: Bond with annual returns of 4%
Investment C: Bond with annual returns of 12%
Which of the above investments should the company consider taking on given its internal cost of capital?
Select one:
a. A only
b. C only
c. A and C only
d. B only
since the cost of capital is 7%, the investment the company chooses should generate returns more than 7% so that the company can earn profits.
It is only investment a and c that would be suitable based on this criteria