Question
1. The cost of capital associated with a project depends on Select one: a. the whims of investors. b. the management of the company that
1. The cost of capital associated with a project depends on
Select one:
a. the whims of investors.
b. the management of the company that requires the funds.
c. the risk of the project.
d. the debt-equity ratio of the company that requires the funds.
e. the stability of the financial market.
2.
X-Tra Ltd. has a firm-wide WACC of 10%. However, it uses a projects unique risk and WACC in its capital budgeting decisions. This decision-making approach is called
Select one:
a. the net present value approach.
b. the subjective approach.
c. the systematic risk approach.
d. the discounted cash flow approach.
e. the pure play approach.
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