The Optimal Capital Budget Occurs at the Point Where Two

question 61

Multiple Choice

The optimal capital budget occurs at the point where two curves intersect.Which of the following is/are one of those curves?

• A)Only statement I is correct
• B)Only statement II is correct
• C)Both statements I and II are correct
• D)Neither statement I nor II is correct

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Definitions:

WACC

Weighted Average Cost of Capital; a calculation that reflects the cost of a company's financing including both debt and equity.

Return on Investment

A financial ratio used to evaluate the efficiency or profitability of an investment, calculated by dividing the benefit (return) of an investment by the cost of the investment.

Investment Centres

Business segments or units within an organization that are responsible for their own revenues, expenses, and asset investments.

Performance Evaluation

The systematic assessment of an employee, process, or organization's performance, usually against set objectives or criteria.