In theory, using the same discount rate to evaluate all projects can lead to

Question

Quizplus · Accepted Answer

Using the same discount rate for all projects can lead to the rejection of low-risk projects that should be accepted, acceptance of high-risk projects that should be rejected, and manipulation of the discount rate by employees with a vested interest in a project. Therefore, none of the options are ideal, and using a uniform discount rate may not be the best way to evaluate all projects.

In Theory, Using the Same Discount Rate to Evaluate All