Fussy Inc.is composed of two different divisions: food catering and shoe making.The company's overall WACC is 10 percent,while the WACC for the food catering division is 9 percent and for the shoe making division is 12 percent.What would happen if the company used the overall WACC in the valuation of the following independent projects?
A) Incorrectly accept project III and incorrectly reject project IV
B) Incorrectly accept projects II and III
C) Incorrectly reject project I and incorrectly accept project III
D) Incorrectly reject projects I and IV
Correct Answer:
Verified
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