Find ​ ​ ​

question 371

Multiple Choice

Find ​ ​ ​

• A) ​
• B) ​
• C) ​
• D) ​
• E) ​

---

Definitions:

Cost of Capital

The return rate that a company must earn on its investment projects to maintain its market value and attract funds.

Capital Rationing

The process of selecting the best projects for investment under conditions of limited resources, ensuring optimal utilization of capital.

Negative NPVs

Situations where the Net Present Value of an investment is less than zero, indicating that the project’s projected earnings, discounted back to the present value, are less than the initial investment, suggesting it may not be profitable.

Positive NPVs

Situations where the Net Present Value of an investment or project is greater than zero, indicating profitability.