The weighted average cost of capital approach to decision making is not directly affected by the
a. value of the common stock.
b. current budget for capital expansion.
c. cost of debt outstanding.
d. proposed mix of debt, equity, and existing funds used to implement the project.
B
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A capital investment has a net present value of? $1,000.00 at a required rate of return of? 10%. At a? 12% required rate of? return, the net present value of the investment is? $100.00. At a? 14% required rate of? return, the net present value of the investment is? $0. The capital investment should be rejected if? ________.
A) the required rate of return exceeds 14% B) the required rate of return exceeds 12% C) the required rate of return is less than 14% D) the required rate of return is less than 12%
Many companies that use the declining-balance method of depreciation switch to the straight-line method at some point in the life of a depreciable asset. When does that switch normally occur?
A. never, since one method must be applied consistently throughout the life of an asset B. in the last quarter of the life of the asset C. when the depreciation cost under the accelerated method exceeds the depreciation cost under the straight-line method D. midpoint in the life of the asset
Improvements in security, especially regarding the millions of shipping containers that enter the U.S. each year, are being held back by the lack of technological advances
Indicate whether the statement is true or false
The responsibility for managing day-to-day operations and carrying out corporate policies belongs to the ________
A) board of directors B) chief executive officer C) stockholders D) creditors