If a fiRm Uses Its WACC as the Discount Rate

question 112

True/False

If a firm uses its WACC as the discount rate for all of the projects it undertakes, then the firm will
tend to accept some negative net present value projects.

---

Definitions:

Knowledge Management

The process of creating, sharing, using, and managing the knowledge and information of an organization to achieve its objectives.

Microeconomic Principles

The study of decisions made by individuals and businesses regarding the allocation of resources and prices of goods and services.

Traditional Accounting

The conventional method of recording and reporting financial transactions, focused on historical data and compliance with financial regulations and standards.

Industrial Engineering

A field of engineering focused on optimizing complex processes, systems, or organizations by eliminating waste and improving efficiency.