Which One of the Following Statements Is Correct

question 78

Multiple Choice

Which one of the following statements is correct?

• A)The subjective approach assesses the risks of each project and assigns an adjustment factor that is unique just for that project.
• B)Overall, a firm makes better decisions when it uses the subjective approach than when it uses its WACC as the discount rate for all projects.
• C)Firms will correctly accept or reject every project if they adopt the subjective approach.
• D)Mandatory projects should only be accepted if they produce a positive NPV when the firm's WACC is used as the discount rate.
• E)The pure play approach should only be used with low-risk projects.

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Definitions:

United States

A country located in North America, known for its significant impact on global finance, culture, technology, and politics.

Backflow

The undesirable reversal of the flow of water or mixtures of water and other undesirable substances into the distribution pipes of the potable water supply from any source or sources.

Migrants

Individuals or groups who move from one region or country to another, often for reasons such as employment, education, or to escape conflict.

Industrialized Nation

A country characterized by a developed economy with a significant industrial sector, providing a high standard of living for its citizens.