26.

Which of these may occur if a firm uses its overall cost of capital as the discount rate for all projects? I. Profitable low-risk projects may be incorrectly rejected. II. Only projects with risks similar to the current firm will be accepted. III. Too many high-risk projects may be accepted. IV. Only low-risk projects will be accepted.

II only

II and IV only

I and III only

I and IV only

I, II, and III only