Which of the Following Statements Is FALSE

question 84

Multiple Choice

Which of the following statements is FALSE?

• A)To determine the project's debt capacity for the interest tax shield calculation,we need to know the value of the project.
• B)To compute the present value of the interest tax shield,we need to determine the appropriate cost of capital.
• C)Because we don't value the tax shield separately,with the APV method we need to include the benefit of the tax shield in the discount rate as we do in the WACC method.
• D)A target leverage ratio means that the firm adjusts its debt proportionally to the project's value or its cash flows.

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Definitions:

Performance Targets

Specific goals set by a business or project to gauge the effectiveness of operations and employees.

Strategic Initiatives

Key projects or plans undertaken by an organization to support and achieve its long-term goals and objectives.

Performance Metrics

Key indicators used to evaluate the success or efficiency of an activity or organization in achieving its objectives.

Strategic Objectives

Specific, measurable goals established by an organization to achieve its long-term aspirations and mission.