WACC Applied

The speaker covers the practical application of the weighted average cost of capital, or  WACC.  He suggests that if the cost of capital is less than the IRR of the project, the project is worth undertaking.  However, if the project has an IRR which is less than the WACC, the project return is less than the cost of capital used to fund the project.  He mentions that is very important to use the project specific WACC versus the overall corporate WACC when analyzing the cost benefit scenario of the company.