When We Use the WACC to Assess a Project, We

question 54

Multiple Choice

When we use the WACC to assess a project, we assume that the ________ ratio does not change.

• A) reward to systematic risk
• B) risk to reward
• C) debt to equity
• D) volatility to systematic risk

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Definitions:

Collection Time

The average period it takes for a company to receive payments owed by its customers after a sale has been made.

BAT Model

The BAT model is a term used in various contexts, including finance for "Behavioral Analysis Training," but if referring specifically to a financial model, clarification is needed as it may not apply. Without a specific context, providing an accurate definition is challenging.

Miller-Orr Model

is a financial management strategy designed to optimize cash balances by setting upper and lower limits on cash reserves.

Weekly Cash Flows

An accounting measure used to monitor the cash movement in and out of a business on a weekly basis.