Which of the Following Statements Are Correct

question 16

Multiple Choice

Which of the following statements are correct?
i.Using the same risk-adjusted discount rate to discount all future cash flows adjusts for the fact that the more distant cash flows are often more risky than cash flows occurring sooner.II.If you can borrow all of the money you need for a project at 5%,the cost of capital for this project is 5%.III.The best way to obtain the cost of debt capital for a firm is to use the coupon rates on its bonds.IV.A firm's weighted-average cost of capital is NOT the correct discount rate to use for all projects undertaken by the firm.

• A) I and III only
• B) II and IV only
• C) I and II only
• D) I and IV only
• E) I,II,and III only

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Definitions:

Individual

Pertaining to a single person or thing, as opposed to a group or collective.

Duration of Behavior

The length of time over which a particular behavior or set of behaviors is observed or continues to occur.

Identified Stimulus

A specific environmental cue or event that is recognized and can trigger a particular response.

Magnitude

in a general sense, refers to the size, extent, or importance of something. In a scientific context, it often relates to the quantitative measure of a physical property.