How does the valuation of a firm vary from the valuation of a project using WACC?

Question

Quizplus · Accepted Answer

When valuing a firm, a terminal value is typically included to account for the long-term value of the business beyond the projection period. This is not usually done when valuing a project, which is typically valued based on the cash flows generated during the project's lifespan. A and B are incorrect because book values are not always used as weights for WACC and debt and equity weights are typically set based on market values. D is incorrect because debt is adjusted for taxes when computing the WACC. E is incorrect because the WACC does not need to be set equal to any specific value when valuing a firm or project.

How Does the Valuation of a Firm Vary from the Valuation