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Why would a firm not use its weighted average cost of capital (WACC) to evaluate all...

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Finance

Why would a firm not use its weighted average cost of capital(WACC) to evaluate all proposed investments? Please give examplesas well

Under what circumstances will the IRR and NPV rules lead to thesame decision (accept/reject)? When might they conflict? Pleasegive examples as well

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1 A firm would not use its weighted average cost of capital WACC to evaluate all proposed investments because WACC represents the required return of a firm But sometimes the proposed investments risk might be different from that of the firm as a whole For example If a pharmaceutical firm which is into manufacturing of generic medicines is proposed to venture into new line of medicines based on RD then it cannot use WACC    See Answer
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Why would a firm not use its weighted average cost of capital(WACC) to evaluate all proposed investments? Please give examplesas wellUnder what circumstances will the IRR and NPV rules lead to thesame decision (accept/reject)? When might they conflict? Pleasegive examples as well

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