The Overall Weighted Average Cost of Capital Is Used Instead

question 74

Multiple Choice

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

• A) the use of the cost for individual 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) the use of the cost for specific sources of capital would make investment decisions inconsistent, and investments funded by low-cost debt would have an advantage over other investments.

---

Definitions:

Calculated Incompetence

Calculated incompetence is the deliberate act of pretending or claiming to be less capable or knowledgeable than one truly is, often to avoid responsibility or work.

Misleading Information

False or inaccurate information intended to deceive or mislead someone.

Manipulative Actions

Actions designed to control or influence others in a subtle or deceptive manner.

Concealing Information

The act of intentionally hiding or withholding information from others.