A firm's cost of capital (WACC) represents the maximum rate of return that a firm can earn from its capital budgeting projects to ensure that the value of the firm does not decrease.
Answer the following statement true (T) or false (F)
False
The cost of capital is used in the capital budgeting process so that a firm makes correct accept/reject decisions and so that its level of financing is optimal. If it uses any other rate, its capital budget will not be optimal. The WACC represents the minimum rate of return the firm must earn on the investments it purchases; it is the firm’s required rate of return because it is the return investors demand (require) to provide the funds the firm invests. See 11-3: Combining the MCC and Investment Opportunity Schedules (IOS)
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The budgeted balance sheet assumes that all operating and financing plans are met
Indicate whether the statement is true or false
The EPA was created in order to address all but which of the following forms of pollution?
A) air B) water C) noise D) solid waste
Marvin is walking down the alley looking in trashcans just to see what is there. He finds an old
broken baseball trophy that the owner has obviously thrown away. Marvin has always wanted such a trophy, so he takes it home. Marvin has: A) Acquired the trophy by finding lost property. B) Acquired the trophy by claiming abandoned property. C) Acquired the trophy by accession. D) Acquired the trophy by capture. E) Stolen the trophy.
The revenue recognition principle is the basis for recording revenues-both when to record revenue and the amount of revenue to record
Indicate whether the statement is true or false