The subjective approach to project analysis: a. is only used when a company has a complete capital structure. B uses Company X’s WACC as the basis for the discount rate for a project considered by Company Y. c. assigns discount rates to projects based on the discretion of a company’s senior management. D. allows managers to randomly adjust the discount rate assigned to a project once the beta version of the project is determined. and. applies a lower discount rate to fully equity-financed projects compared to partially debt-financed projects.
Answer 1
The correct answer is C “Assigns discount rates to projects based on the discretion of a company’s senior management”. Explanation: The abstract way of handling company review distributes discount rates to companies dependent on the care of a company’s administrators. The senior oversight group takes on the most important job in choosing the shrinkage rate in the business.
answer 2
Assigns discount rates to projects based on the discretion of a company’s senior management (C) Explanation: The subjective approach to project analysis allows assigning a discount rate to projects funded by the using a method without debt (equity) of the company. although the discount is still applied to the project at the discretion of senior executives/company managers. Projects financed by loans or other debt-prone financing cannot be approved for discounts by senior corporate executives because the project is debt-prone, so the subjective approach cannot be applied.
answer 3
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answer 4
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