Consider Netflix decides to throw it's hat into the cloud storage industry. All of their previous projects were in the streaming space where they were market leaders and they had a clear understanding of the demand and cost drivers. Assume that the new investment into the cloud storage was a riskier project than typical for Netflix.

To keep things simple, the analysts working at Netflix just use the WACC for the firm as the discount rate for the project.

Which of the following is true.

a. Netflix will be more likely to accept the project when they shouldn't have accepted it

b. Both will occur

c. Netflix will less likely to accept the project when they should have accepted it