Which One of the Following Is a Capital Structure Decision

question 32

Multiple Choice

Which one of the following is a capital structure decision?

• A)determining which one of two projects to accept
• B)determining how to allocate investment funds to multiple projects
• C)determining the amount of funds needed to finance customer purchases of a new product
• D)determining how much debt should be assumed to fund a project
• E)determining how much inventory will be needed to support a project

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Definitions:

Option To Wait

The flexibility to delay an investment or project to gather more information or wait for favorable conditions.

Discount Rate

The discount rate applied in DCF analysis to calculate the current worth of anticipated future cash flows.

Option To Wait

A strategic decision opportunity in investment where the investor can delay an investment decision to gather more information or for conditions to improve.

Soft Capital Rationing

Internal constraints imposed by a company's management on the funds allocated for new investments, often due to budgetary constraints.