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When Using the WACC as a Discount Rate,it Is Often

question 95

True/False

When using the WACC as a discount rate,it is often adjusted upward for riskier projects and downward for safer projects.


Definitions:

Effortless

Achieved with remarkable ease and without apparent difficulty or exertion.

Representativeness Heuristic

A mental shortcut that involves making judgments about the probability of an event under uncertainty, based on how much it resembles the typical case.

Availability Heuristic

A cognitive shortcut that relies on immediate examples that come to a person’s mind when evaluating a topic, concept, method, or decision.

Confirmation Bias

The tendency to search for, interpret, favor, and recall information in a way that confirms one’s preexisting beliefs or hypotheses.

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