If a typical u. s. company correctly estimates its wacc at a given point in time and then uses that same cost of capital to evaluate all projects for the next 10 years, then the firm will most likely a. accept too many low-risk projects and too few high-risk projects. b. become riskier over time, but its intrinsic value will be maximized. c. become less risky over time, and this will maximize its intrinsic value. d. continue as before, because there is no reason to expect its risk position or value to change over time as a result of its use of a single cost of capital. e. become more risky and also have an increasing wacc. its intrinsic value will not be maximized.

Joint cost cheyenne, inc. produces three products from a common input. the joint costs for a typical quarter follow: direct materials $45,000 direct labor 55,000 overhead 60,000 the revenues from each product are as follows: product a $75,000 product b 80,000 product c 30,000 management is considering processing product a beyond the split-off point, which would increase the sales value of product a to $116,000. however, to process product a further means that the company must rent some special equipment costing $17,500 per quarter. additional materials and labor also needed would cost $12,650 per quarter. a. what is the gross profit currently being earned by the three products for one quarter? $answer b. what is the effect on quarterly profits if the company decides to process product a further? $answer