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Your firm sells packaging materials. The business is very stable and investors have rewarded the firm with a low cost of capital, estimated at 8%.
Your firm sells packaging materials. The business is very stable and investors have rewarded the firm with a low cost of capital, estimated at 8%. You are evaluating a new packaging project. You should require an 8% return on the project since this represents the cost of external financing for the firm.
A. True.
B. False.
C. Not enough information to answer.
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