Question
Company XYZ is preparing to launch a significant capital budgeting project. The following scenarios could occur during the planning and execution phases. Select all the
"Company XYZ is preparing to launch a significant capital budgeting project. The following scenarios could occur during the planning and execution phases. Select all the scenarios that would positively impact the project's Net Present Value (NPV): A) XYZ manages to secure a low-interest loan to finance part of the project, effectively reducing the weighted average cost of capital (WACC). B) A change in government policy results in a reduction of corporate taxes, increasing XYZ's after-tax cash flows. C) A global economic recession occurs, which leads to a decline in overall consumer demand for XYZ's products. D) XYZ successfully implements cost-saving measures during the project, thereby reducing the initial outlay and future operational costs. E) XYZ identifies a faster-than-expected depreciation method for the new capital assets that result in higher tax shields. F) XYZ's competitor introduces a similar but more advanced project, taking a significant portion of XYZ's expected market share. G) Due to inflation, the price of raw materials necessary for the project decreases, causing a reduction in project cost."
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