Question: If all projects are assigned the same discount rate for purposes of evaluation, which of the following could occur? Low - risk projects could be

If all projects are assigned the same discount rate for purposes of evaluation, which of the following could occur?
Low-risk projects could be rejected when in fact they are good investment choices.
High-risk projects could be accepted when in fact they are poor investment choices.
The firm will become riskier over time because high-risk projects are more likely to be chosen than low-risk projects.
All of the above
If all projects are assigned the same discount

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Q:

If all projects are assigned the same discount rate for purposes of evaluation, which of the following could occur? 10 Your choice: 10/10 Qs A: Low-risk projects could be rejected when in fact they...

Q:

Question 2 (1 point)\ Your firm has issued a 20-year $1,000.00 par value semiannual 10% coupon bond that sells for $1,000 in the\ market place. The proceeds from the sale of the bond issue are...

Q:

Which of the following could occur if the financial manager assigns all projects with the same discount rate for purposes of evaluation? 8 Your choice: 8/15 Qs A: Low-risk projects could be rejected...

Q:

Please provide a maximum one-page summary of how we can analyze the cost of capital for our project (below) vis--visthe peer-reviewed research article attached. Consider risk as you decide. What...

Q:

i am taking Cooperate finance which is FIN222 can help me to answer.. ? Tutorial 1 Topic 1 Chapter 1 4. What are the main advantages and disadvantages of organising a firm as a corporation? 6. You...

Q:

Q.1 A company finances its operations with 40 percent debt and 60 percent equity. Its net income is I = $16 million and it has a dividend payout ratio of x = 25%. Its capital budget is B = $15...

Q:

BLC Inc. is a medium-sized manufacturing company based in the UK. The company operates mainly in the London area and is based in Peterborough. At a recent board meeting, the company decided to expand...

Q:

can someone else help me for that ? i need solution or detail how can you do it ? FINA3313-005 Homework 3 Fall 2015 Chapter 08 Net Present Value and Other Investment Criteria True / False Questions...

Q:

requesting assistance with a paper. See instructions in the documents below. Final Project Background information Background Information (applies to Milestones One through Three): Bayer is a life...

Q:

During the depression of the 1930s, Ben Jenkins, Sr., a wealthy, expansion-oriented lumberman whose family had been in the lumber business in the southeaster United States for several generations,...

Q:

Why does Marx think: i) innovations by some enterprise (which he argues increases their share of relative surplus value) lead to concentration and growth among winning enterprises that result...

Q:

Your broker has recommended that you buy the stock of a new company. She told you that the company will not be paying any dividend for the next five years and in the fifth year the company is...

Q:

Wich of the following is a disadvantage of dual pricing? A . The price arrived by using dual pricing has no specific relationship to either costs or the market price. B . It insulates managers from...

Q:

Describe how total variable costs and unit variable costs behave with changes in the level of activity. If fixed costs increase, what would be the impact on the contribution margin and income from...