What is wrong with this policy in what types of projects


A corporation’s policy manual states: "Our company’s policy is to use 12%, which is our cost of capital, as the discount rate for NPV calculations on all projects considered for investment." What is wrong with this policy? In what types of projects will this company overinvest? In what types of projects will it underinvest??

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Financial Management: What is wrong with this policy in what types of projects
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