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If a firm uses its weighted average of capital (WACC) as the discount rate for all of the projects it undertakes then the firm will

If a firm uses its weighted average of capital (WACC) as the discount rate for all of the projects it undertakes then the firm will tend to I. Reject some positive net present value projects Ii. Accept some negative net present value projects III. Favor low risk projects over high risk projects. Iv. Increase its overall level of risk over time

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