Donaldsen Engines Is Comprised of Three Business Units, Research and Development

Donaldsen Engines is comprised of three business units, research and development, small motors, and jet engines. The research and development unit has the greatest level of risk while the small
Motors unit has the lowest level of risk. If Donaldsen applies the firm's WACC to all project
Proposals, the firm will underfund the _____ division and overfund the _____ division(s) .

A) Small motors; jet engines and research and development.
B) Jet engines; small motors.
C) Small motors; research and development.
D) Research and development; small motors.
E) Research and development; small motors and the jet engine.