When Using the Pure Play Approach for a Proposed Investment

Multiple Choice

When using the pure play approach for a proposed investment, a firm is primarily seeking a rate of return that:

A) is based on the actual source of funds that will be used to fund the project.
B) creates a positive net present value for the project.
C) reflects the size and life of the project.
D) most closely correlates with the proposed investment's internal rate of return.
E) best matches the risk level of the proposed investment.