To Be Attractive the New Investment Project Must Have an Expected

question 69

Multiple Choice

To be attractive the new investment project must have an expected return at least ________ that of a comparable investment opportunity.

• A) bigger than
• B) smaller to
• C) different to
• D) equal to

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Definitions:

Capacity

refers to the maximum level of output that a company can sustain to produce goods or services under normal working conditions.

Retention Ratio

This metric indicates the percentage of net income a firm retains to reinvest in its business rather than distributing to shareholders as dividends.

Dividend Payout Ratio

The fraction of earnings a company pays out to its shareholders in the form of dividends.