The WACC is not always the appropriate discount rate for projects under consideration. Sometimes a higher or lower discount rate should be used. The WACC would be the appropriate discount rate in which of the following cases?

I. The firm is producing the same product but is moving into a whole new market in which they have never operated before.

II. The firm is replacing office equipment with a new brand name.

III. A firm is offered a zero interest rate loan to wholly finance the cost of a new production facility in Brazil.

IV. The firm is investing and using its typical funding mix to increase plant capacity by 20%

• AIV only
• BII and IV only
• CI and IV only
• DII and III only