Question
After calculating WACC for determining the required rate of return a corporation must achieve on a capital project, an additional percentage maybe add to take
After calculating WACC for determining the required rate of return a corporation must achieve on a capital project, an additional percentage maybe add to take into consideration:
A. How large the project is.
B. Additional risks the project may bring to the corporation above what the normal acceptable risk is.
C. The interest rate is in the bond market.
D. How long will it take to complete the project.
Present value analysis when used in conjunction with capital projects:
A. It is used to determine the present value of future cash flows.
B. It is not taken into consideration because it is not a relevant cost.
C. Is the future value of cash flow.
D. None of the above.
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