An Appropriate Guideline to Adopt When Determining the Valuation Formula

Multiple Choice

An appropriate guideline to adopt when determining the valuation formula to use is:

A) never use the APV approach.
B) use APV if the project is far different from scale enhancing.
C) use WACC if the project is close to being scale enhancing.
D) Both never use the APV approach; and use WACC if the project is close to being scale enhancing.
E) Both use APV if the project is far different from scale enhancing; and use WACC if the project is close to being scale enhancing.