Which One of the Following Statements Is Correct

question 12

Multiple Choice

Which one of the following statements is correct?

• A) Firms should accept low-risk projects prior to funding high-risk projects.
• B) Making subjective adjustments to a company's WACC when determining project discount rates unfairly punishes low-risk divisions within the company.
• C) A project that is unacceptable today might be acceptable tomorrow given a change in market returns.
• D) The pure play method is most frequently used for projects involving the expansion of a company's current operations.
• E) Companies that elect to use the pure play method for determining a discount rate for a project cannot subjectively adjust the pure play rate.