1. If a firm uses its WACC as the required return on all projects, the firm will _____.

a. accept all projects

b. accept all projects whose required return is greater than the WACC

c. accept all projects whose required return is less than the WACC

d. become riskier in the long run

2. If a firm uses its WACC to discount cash flows from low-risk projects, it will accept _____ projects.

a. too few

b. no

c. too many

d. the correct number of