A CFO May End Up Undertaking Negative NPV Projects If

question 30

Multiple Choice

A CFO may end up undertaking negative NPV projects if he has

• A)overestimated the expropriation concerns of the firm's creditors when estimating his firm's WACC.
• B)ignored the inside information concerns of investors.
• C)underestimated transaction costs when calculating his firm's WACC.
• D)both B and C.

---

Definitions:

Marginal Rate

Often linked to taxation or utility, it is the rate applied to the next dollar of income or the next unit of consumption.

Tee Shirts

Casual garments with short sleeves, typically made of cotton, characterized by their T-shaped design.

Marginal Rate

A term that can refer to the extra or additional cost or benefit associated with producing one more unit of output or engaging in one more unit of an activity.

Tee Shirts

Garments typically made of cotton, with short sleeves and no collar, popular as casual wear.