For a Multi-Product fiRm, If a Project's Beta Is Different

question 7

Multiple Choice

For a multi-product firm, if a project's beta is different from that of the overall firm, then the:

• A)CAPM can no longer be used.
• B)project should be discounted using the overall firm's beta.
• C)project should be discounted at a rate commensurate with its own beta.
• D)project should be discounted at the market rate.
• E)project should be discounted at the T-bill rate.

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Definitions:

Positive Reinforcement Technique

A behavior modification strategy that involves rewarding desirable behaviors to increase the likelihood of their recurrence.

Intrinsic Motivation

The drive to perform an activity for its own sake and personal rewards, rather than for some external reward or pressure.

Automobile Showroom

A retail space where new or used cars are displayed for sale to potential buyers.

Fixed Ratio Schedules

A type of reinforcement schedule where a response is reinforced only after a specified number of responses.