Capital Allocation Pitfalls and Real Opt

A risky foreign expansion is evaluated using the firm's overall $WACC$ even though its risk is much higher. Which pitfall is this?

Using the wrong risk-adjusted discount rate.

Why can ignoring competitors', customers', or suppliers' reactions lead to bad capital allocation decisions?

Projected cash flows may be overstated.

A division proposes a weak project mainly so it can use up this year's approved capital budget. Which pitfall is this?

Spending just because budget exists.

A company can shut down and sell equipment if a project performs poorly. What type of real option is this?

An abandonment option.