Which of the Following Statements Is True

question 97

Multiple Choice

Which of the following statements is true?

• A) If the new project is riskier than the firm's existing projects, then it should be charged a higher cost of capital.
• B) If the new project is riskier than the firm's existing projects, then it should be charged a lower cost of capital.
• C) If the new project is riskier than the firm's existing projects, then it should be charged the firm's cost of capital.
• D) The new project's risk is not a factor in determining its cost of capital.

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Definitions:

Tornadoes

Violently rotating columns of air that are in contact with both the surface of the Earth and a cumulonimbus cloud or, in rare cases, the base of a cumulus cloud.

Cyclones

Large scale air mass that rotates around a strong center of low atmospheric pressure, associated with storms and bad weather.

Environmental Racism

The disproportionate impact of environmental hazards on minority communities due to discriminatory practices.

Disproportionately

Refers to an unequal or imbalanced distribution or representation in comparison with a standard or expected ratio.