Question
The management of Marcel's uses the firm's weighted average cost of capital (WACC) as the required return for projects similar to those of its existing
The management of Marcel's uses the firm's weighted average cost of capital (WACC) as the required return for projects similar to those of its existing operations. For projects of higher risk, it uses a rate equal to WACC plus 2 percent. For projects of lower risk, it subtracts 2 percent from its WACC. The firm is taking the _____ approach to assigning a required return to a project.
___A.objective
___B.subjective
___C.down play
___D.normative
___E.pure play
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516
