The subjective approach to project analysis

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The subjective approach to project analysis:

Allows managers to randomly adjust the discount rate assigned to a project once the project's beta has been determined.

Applies a lower discount rate to projects that are financed totally with equity as compared to those that are partially financed with debt.

Assigns discount rates to projects based on the discretion of the senior managers of a firm.

Uses the WACC of Firm X as the basis for the discount rate for a project under consideration by Firm Y.

Is used only when a firm has an all-equity capital structure.

Reference no: EM13950035

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