This is a four part question: 1. Explain what WACC is. 2. Why not use a single hurdle rate in analyzing all of a firm’s potential investments?

This is a four part question:

1. Explain what WACC is.

2. Why not use a single hurdle rate in analyzing all of a firm’s potential investments?  

3. What are some other potential hazards when using discounted cash flow techniques in investment appraisals?

4. Give an example of a scenario where using these types of flow techniques would be inaccurate or otherwise hazardous.