By using a firm's WACC to analyze all potential investments, we risk incorrectly accepting some suitable projects.

Name: By using a firm's WACC to analyze all potential investments, we risk incorrectly accepting some suitable projects.
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Using a firm's WACC (Weighted Average Cost of Capital) to analyze potential investments ensures that only projects that exceed the firm's cost of capital are accepted, aiming to avoid unsuitable projects rather than incorrectly accepting them.

By Using a Firm's WACC to Analyze All Potential Investments