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Discuss the long-term consequences of the practice

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Reference no: EM132789141

As a recent MBA graduate, you are involved in the project analysis of your company that has three divisions in different business sectors. Your company's current practice for project analysis is to apply its weighted average cost of capital (WACC) of 12% as a single hurdle rate to all projects across all three divisions.

problem (a) Criticize your company's current practice of project evaluation;

problem (b) Discuss the long-term consequences of following this practice including with respect to the riskiness of projects to be accepted and rejected; and

problem (c) What alternative practical criteria would you suggest to your boss for project evaluation?

Reference no: EM132789141

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