You work at Merck & Company (MRK), a well-known pharmaceutical company. Part of your job is to complete business case analyses for different drugs under development. One day, you are assigned to complete an analysis on a drug that has, so far, shown great promise for treating pancreatic cancer. After completing your revenue forecast under the assumption that the drug passes its next round of testing, you know that you need to discount those cash flows to find the present value. The drug isn't the most risky project the company has ever tried to produce, but it also is not the least risky. You decide that the best way to treat these cash flows is as if the drug was an average risk project for the firm.

Is the WACC the appropriate discount rate to use for this project? Why or why not?