Ican 2026 Financial Management Question 3

Emeka Ltd is considering investment proposals for each of its three divisions: Light Engineering; Food Retailing; and Luxury Goods. The company’s board previously used a single WACC of 17% for all project evaluations. However, the finance team recently determined division-specific WACC rates as follows: Division Risk-Adjusted WACC Light Engineering 16.5% Food Retailing 15.3% Luxury Goods 18.9% Each division has proposed a major capital project for the next investment cycle: Project Division Initial Expected Investment IRR (%) (₦m) A Light ₦500m 16% B Food ₦700m 16% C Luxury Goods ₦800m 18%