Answer Happy

Kim Inc. must install a new air-conditioning unit in its main
plant. Kim must install one or the other of the units; otherwise,
the highly profitable plant would have to shut down. Two units are
available, HCC and LCC (for high and low capital costs,
respectively). HCC has a high capital cost but relatively low
operating costs, while LCC has a low capital cost but higher
operating costs because it uses more electricity. The costs of the
units are shown here. Kim's WACC is 7.5%.
Which unit would you recommend?
-Select-IIIIIIIVVItem 1
If Kim's controller wanted to know the IRRs of the two projects,
what would you tell him?
-Select-IIIIIIIVVItem 2
If the WACC rose to 15% would this affect your
recommendation?
-Select-IIIIIIIVVItem 3
Why do you think this result occurred?
-Select-IIIIIIIVV