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Which one of the following statements is correct? Firms that elect to use the pure play method for determining a discount rate for a project
Which one of the following statements is correct? |
Firms that elect to use the pure play method for determining a discount rate for a project cannot subjectively adjust the pure play rate. |
A project that is unacceptable today might be acceptable tomorrow given a change in market returns. |
Firms should accept low-risk projects prior to funding high-risk projects. |
The pure play method is most frequently used for projects involving the expansion of a firm's current operations. |
Making subjective adjustments to a firm's WACC when determining project discount rates unfairly punishes low-risk divisions within a firm. |
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