An appropriate guideline to adopt when determining the valuation formula to use is:

Question

Quizplus · Accepted Answer

The appropriate guideline to adopt when determining the valuation formula to use is to use WACC if the project is close to being scale enhancing, and to use APV if the project is far different from scale enhancing. Therefore, both options B and C are the best choices. Option A is incorrect as APV may be appropriate in certain situations. Option D is incorrect as it contradicts the appropriate guideline.

An Appropriate Guideline to Adopt When Determining the Valuation Formula