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QUESTION 4 (a) Why are investors and managers concerned about market efficiency? (2 marks) (b) In capital budgeting explain why the cost of capital is

QUESTION 4 (a) Why are investors and managers concerned about market efficiency? (2 marks) (b) In capital budgeting explain why the cost of capital is referred to as the 'hurdle' rate? The profitability index can be known as a scaleless attribute for measuring a projects benefits relative to the costs. How might this help to eliminate bias in project selection? (3 marks)

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