Which of the Following Statements Is False About "Borrowing Capacity

question 59

Multiple Choice

Which of the following statements is false about "borrowing capacity"?

• A)It is an especially important point in international capital budgeting analysis because of the frequency of large concessionary loans.
• B)It creates tax shields for APV analysis regardless of how the project is actually financed.
• C)It is synonymous to the "project debt."
• D)It is based on the firm's optimal capital structure.

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