It is incorrect to use the firm's discount rate when valuing a new project because:
A) you must adjust the discount rate for the project based on the firm's risk.
B) you must adjust the discount rate for the project based on the project risk.
C) you must exercise risk aversion and use the market rate.
D) an average rate across prior projects is acceptable because estimates contain errors.
E) one must have the actual data to determine any differences in the calculations.
Correct Answer:
Verified
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