14 of 30 Unsure Mark Which of the following statements is not true about the weighted average cost of capital (WACC) method? O a. Average company WACC should not be used for evaluating projects in a multi-segment conglomerate O b. WACC adjusts for the tax deductibility of interest costs O C. If WACC is less than IRR of a strip mine project, then, the NPV of the project will always be greater than zero O d. If WACC is greater than the IRR of a project and the cash flows are conventional, then, the NPV of the project will always be less than zero O e WACC cannot be used to evaluate projects in which the capital structure is significantly different from the firm's overall structure 15 of 30 Unsure 1 Mark Automobile insurance companies attempt to reduce the problem of moral hazard by: O a. Offering no-fault insurance. O b. Requiring a deductible on insurance claims. O c. By segmenting the market into low risk and high risk groups. O d. Offering liability insurance to drivers with bad driving records, but refusing to offer collision insurance. O e. Refusing to insure bad drivers