A Firm Should Never Accept a Project If Its Acceptance

question 107

True/False

A firm should never accept a project if its acceptance would lead to an increase in the firm's cost of capital (its WACC).

---

Definitions:

Euthanasia

The deliberate ending of the life of a person who has an incurable or painful disease.

Total Institutions

Places where individuals are cut off from the wider society and lead an enclosed, formally administered life, examples include prisons and military boot camps.

Secondary Socialization

The process of learning appropriate behavior and norms in society beyond the immediate family, through entities such as schools, peer groups, and media.

Primary Socialization

The initial phase of social learning in childhood through which individuals become aware of societal norms and values, largely influenced by family and immediate social environment.