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Required information Exercise 16-24 (Algo) Present value analysis-cost of capital LO 16-6 [The following information applies to the questions displayed below.] National Leasing is
Required information Exercise 16-24 (Algo) Present value analysis-cost of capital LO 16-6 [The following information applies to the questions displayed below.] National Leasing is evaluating the cost of capital to use in its capital budgeting process. Over the recent past, the company has averaged a return on equity of 12.5% and a return on investment of 9.5%. The company can currently borrow short-term money for 6.5%. Exercise 16-24 (Algo) Part a Required: a. Which of the preceding rates is most relevant to deciding the cost of capital to use? Multiple Choice 6.5% 12.5% 9.5%
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