Each Project Should Be Judged Against

question 38

Multiple Choice

Each project should be judged against:

• A) the specific means of financing used to support its implementation.
• B) the going interest rate at that point in time.
• C) the cost of new common stock equity.
• D) the weighted average cost of capital.

---

Definitions:

Output

The quantity of goods or services produced within a given period by a firm, industry, or economy.

Average Variable Costs

The total variable costs divided by the number of units produced, representing the variable cost per unit of output.

Total Variable Cost

The total of all costs that vary with output level in the short run.

Output

The total amount of goods or services produced by a company, industry, or economy within a specific period.