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For Apple Inc., if one of its products, I-Phone 12, has a beta that is different from the beta of the overall Apple Inc., which
For Apple Inc., if one of its products, I-Phone 12, has a beta that is different from the beta of the overall Apple Inc., which of the following is correct?
using the beta of the overall Apple Inc. to evaluate the I-Phone 12 project may result in accepting the I-Phone 12 project that actually has a negative NPV. | ||
the I-Phone 12 project should be discounted using the overall firm's beta. | ||
the I-Phone 12 project should be discounted at a rate higher than its own beta for conservativeness. | ||
as I-Phone 12 is the main revenue generator of Apple Inc., the beta of I-Phone 12 should be used to evaluate the risks of the overall Apple Inc. | ||
project should be discounted at the T-bill rate. |
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