Which of the Following Statements Is Correct

question 76

Multiple Choice

Which of the following statements is correct?

• A)If the risk-free rate increases, it will have no impact on the weighted average cost of capital.
• B)Investor returns are reduced when float costs increase, and therefore float costs reduce the weighted average cost of capital.
• C)The weighted average cost of capital is a historical cost.
• D)None of these statements is correct.

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Definitions:

Office Equipment

Tangible items used in an office environment for performing business operations, such as computers, printers, and furniture.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against a fixed asset since it was acquired.

Accumulated Depletion

The total amount deducted from the gross value of an asset to account for the extraction of natural resources over time.

Coal Mine

A physical location where coal is extracted from the earth.