The Overall Weighted Average Cost of Capital Is Used Instead

question 104

Multiple Choice

The overall weighted average cost of capital is used instead of costs for specific sources of funds because

• A) use of the cost for specific sources of capital would make investment decisions inconsistent.
• B) a project with the highest return would always be accepted under the specific cost criteria.
• C) investments funded by low cost debt would have an advantage over other investments.
• D) two of the other answers are correct.

---

Definitions:

Meaningful Work

Employment or activities that are perceived as having significance and purpose, positively contributing to personal or societal well-being.

Social Norms

Unwritten rules and expectations for behavior within a society or group, guiding members on how to act in typical situations.

Postmodern Climate

Describes an era or context characterized by skepticism towards grand narratives, embracing pluralism, and questioning traditional authority and truths.

Long-Term Stability

A state of consistent operation, performance, or condition over an extended period, suggesting reliability and sustainability.