In General, Firms Should Use Their Weighted Average Cost of Capital

question 4

True/False

In general, firms should use their weighted average cost of capital (WACC) to evaluate capital budgeting projects because most projects are funded with general corporate funds, which come from a variety of sources.However, if the firm plans to use only debt or only equity to fund a particular project, it should use the after-tax cost of that specific type of capital to evaluate that project.

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Definitions:

Inconsistent Tense

Refers to the misuse of past, present, or future tenses in writing, leading to a lack of clarity and cohesion in the text.

Faulty Parallelism

A grammatical error in which parts of a sentence that are meant to be parallel in structure are not consistent in form.

Inconsistent Tense

A grammatical error where verb tenses are not maintained consistently throughout a piece of writing, affecting clarity and coherence.

Acceptance Speech

A speech given to acknowledge and express gratitude for an award, position, or recognition received.