blank 1 choices: internal rate of return, discount rate blank 2 choices: hurdle rate, maximum return blank 3 choices: a direct, an internal

1. The weighted average cost of capital a Aa A company that has both debt and equity in its capital structure will use its weighted average cost of capital (WACC) as its discount rate. Based on your understanding of the weighted average cost of capital, complete the following statements: . The weighted average cost of capital (WACc) is used in the capital budgeting project evaluation used in the calculation of a project's net present against which a project's internal rate of return (IRR) Is process either as the value (NPV) or the compared . In general, there is relationship between a firm's risk level and its weighted average cost of capital True or False: Although the use of market value weights is thearetically superior to the use of book value weights in the calculation of a firm's weighted average cost of capital (WACC), firms often use book value weights due to their relative stability compared to the daily changes in market values O False O True True or False: A firm's new investments, existing assets, and captal stractur affect its overall degree of risk and, in tum, its weighted average cost of capital (WACC) O True O False