In General,firms Should Use Their WACC to Evaluate Capital Budgeting

question 9

True/False

In general,firms should use their WACC to evaluate capital budgeting projects because most projects are funded with general corporate funds,which come from a variety of sources.However,if the firm plans to use only debt or only equity to fund a particular project,it should use the after-tax cost of that specific type of capital to evaluate that project.

---

Definitions:

Fraud

Intentional deception made for personal gain or to damage another individual, involving false representation of facts, omission of information, or other deceitful practices.

Illegal Contract

A contract that is void and unenforceable because it involves activities that are against the law.

Quasi-Contract

A legal concept where a court enforces an obligation between parties as if they had entered into a contract, to prevent unjust enrichment.

Pari Delicto

A legal doctrine meaning "in equal fault," used to indicate that two or more parties are equally at fault for a wrong.