When Determining the Cost of Capital for a New Project

question 117

Multiple Choice

When determining the cost of capital for a new project, the firm should consider the:

• A)Discounted rate that makes the NPV equal to zero
• B)IRR of the investment
• C)Cost of capital of a project of similar risk
• D)Cost of capital facing the firm

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Definitions:

Confidential Information

Sensitive data that is protected from unauthorized access to safeguard privacy or secrecy.

Boundaries

Limits or borders that define the space within which actions occur or the extent of acceptable behavior.

Competence

Refers to the ability of an individual or organization to effectively perform or carry out a specific task or role.

Ethical Decision-making

The process of evaluating and choosing among alternatives in a manner consistent with ethical principles.