Capital Budgeting Proposals Should Be Evaluated as If the Project

question 47

Multiple Choice

Capital budgeting proposals should be evaluated as if the project were financed:

• A) entirely by debt.
• B) entirely by equity.
• C) half by debt and half by equity.
• D) with the highest cost source of funds, to be safe.

---

Definitions:

Fraud

Wrongful or criminal deception intended to result in financial or personal gain.

Objective Test

A standard or criteria based on factual measures, independent of personal feelings or opinions, used to assess a person's situation or actions.

Duress

A situation where a person performs an act as a result of violence, threat, or other pressures against them, questioning the voluntariness of their decision.

Tort

A civil wrong that causes someone else to suffer loss or harm resulting in legal liability for the person who commits the tortious act.