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Posted on Aug 04, 2024

When a firm has multiple divisions, and it uses its firm-wide discount rate in all of its divisions, it is likely to make the mistake

When a firm has multiple divisions, and it uses its firm-wide discount rate in all of its divisions, it is likely to make the mistake of:

A. Accepting bad projects in low-risk divisions

B. Rejecting good projects in its low-risk divisions

C. Accepting bad projects in its high-risk divisions

D. Both b and c are correct

e. None of the above is correct

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