Which One of the Following Is a Capital Structure Decision

question 32

Multiple Choice

Which one of the following is a capital structure decision?

• A)determining which one of two projects to accept
• B)determining how to allocate investment funds to multiple projects
• C)determining the amount of funds needed to finance customer purchases of a new product
• D)determining how much debt should be assumed to fund a project
• E)determining how much inventory will be needed to support a project

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Definitions:

Cash Operating Expenses

Expenses incurred during the operational activities of a business that affect cash flow, such as paying salaries and purchasing materials.

Simple Rate Of Return

A financial ratio used to calculate the profit an investment will generate, expressed as a percentage of the initial cost.

After-Tax Discount Rate

The rate used to discount future cash flows to their present value after accounting for the effects of taxes.

Working Capital

The difference between a company's current assets and current liabilities, indicating its liquidity and operational efficiency.