The Use of WACC to Select Investments Is Acceptable When

question 9

Multiple Choice

The use of WACC to select investments is acceptable when the:

• A) correlations of all new projects are equal.
• B) NPV is positive when discounted by the WACC.
• C) risks of the projects are equal to the risk of the firm.
• D) firm is well diversified and the unsystematic risk is negligible.
• E) None of these.

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