The Use of WACC as the Discount Rate When Evaluating

question 28

Multiple Choice

The use of WACC as the discount rate when evaluating a project is acceptable when the

• A)company is well established and financially stable.
• B)WACC produces a positive NPV.
• C)risk of the project is equal to the company's overall level of risk.
• D)company is well diversified and the unsystematic risk is negligible.
• E)project has only systematic risk.