Which of the Following Is an Assumption of Capital Budgeting

question 112

Multiple Choice

Which of the following is an assumption of capital budgeting?

• A)The firm can raise new funds at the same opportunity costs as the opportunity cost of the funds it already has on hand.
• B)The firm can raise new funds at the 30-year Federal funds rate.
• C)The firm can raise new funds at the prime interest rate.
• D)The firm can raise new funds at the same interest rate as the mean of the interest rates of the funds it already has on hand.

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Definitions:

Capital Balances

Capital balances refer to the amount of money equity holders have invested in a company, often reflected in the equity section of the balance sheet.

Net Loss

The amount by which a company's expenses exceed its revenues over a specific period, indicating a negative financial performance.

Share

A unit of ownership interest in a corporation or financial asset, representing an equal proportion of the company's capital.