Question

hello, does anyone know in which situation a project can be attractive for investor (IRR>re) but has IRR< WACC??

Answer 1

A projects cash flows will have to be discounted either by the subjects WACC if the projects risk is equal to the firms risk. If the project has more (less) risk than the companys average risk level the discount rate used to discount the projects cash flows will need to be higher (lower) that the subjects WACC. Since IRR leads to a NPV of 0 the project would have to have less risk involved than the company's average risk level in order to have a project with IRR < WACC.