Which of the Following About a Firm's Weighted Average Cost

question 117

Multiple Choice

Which of the following about a firm's weighted average cost of capital (WACC) is FALSE?

• A)It is the after-tax cost of the average dollar of long-term financing to the firm.
• B)It is the appropriate discount rate to evaluate long-term investment projects.
• C)It is the appropriate discount rate to evaluate typical investment projects.
• D)It is the appropriate discount rate to evaluate atypical investment projects.

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Definitions:

Multi-attribute Utility Analysis

A decision-making process that evaluates and compares the utility of different options based on several attributes or criteria.

High Quality Decisions

Decisions that are well-informed, thoroughly analyzed, and likely to lead to positive outcomes due to the consideration of all relevant information and perspectives.

Simple Method

An uncomplicated and straightforward approach or technique to accomplish a task.

Minority Opinions

Views or judgments that are held by a smaller segment of a group, differing from the consensus or majority standpoint.