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If the project has higher than average risk relative to the typical project of the firm, then A) Use the WACC to discount the cash
If the project has higher than average risk relative to the typical project of the firm, then
A) Use the WACC to discount the cash flows for NPV determination. | |
| B) Use a pure play to determine the correct discount rate for the project. |
| C) Use a higher discount rate from a subjective approach relative to WACC. |
| D) Use a lower discount rate from a subjective approach relative to WACC. |
| E) Both B and C would be correct approaches to use. |
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