A Firm Should Never Accept a Project If Its Acceptance

question 107

True/False

A firm should never accept a project if its acceptance would lead to an increase in the firm's cost of capital (its WACC).

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Definitions:

Venture Investors

Individuals or firms that provide capital to start-up companies with high growth potential in exchange for equity.

High Potential

Referring to individuals or entities that exhibit the capacity for significant growth or achievement.

Need for Achievement

A psychological trait characterized by an individual's desire to achieve excellence and set challenging goals.

Adverse Situations

Circumstances or events that are unfavorable and pose challenges to an individual's or organization's goals and objectives.