If a Firm Uses the Same Company Cost of Capital

question 73

Multiple Choice

If a firm uses the same company cost of capital for evaluating all projects, which situation(s) will likely occur?

• A)The firm will reject good low-risk projects only.
• B)The firm will reject good low-risk projects and will accept poor high-risk projects.
• C)The firm will reject good low-risk projects, accept poor high-risk projects, and accept poor high-risk projects.
• D)The firm will accept poor high-risk projects only.

---

Definitions:

Calvin Coolidge

The 30th President of the United States (1923-1929) known for his laconic style, conservative policies, and leadership during the Roaring Twenties.

McNary-Haugen Acts

Proposed federal legislation in the 1920s designed to support agricultural prices by buying surpluses and selling them abroad, though never enacted.

Naval Disarmament

The act of reducing or abolishing naval forces and weaponry, often as part of broader disarmament treaties or efforts to prevent escalation of military conflicts.

Territorial Status Quo

Refers to the maintenance of existing territorial boundaries or conditions without change.