Which of the Following Is True of the APV Method

question 17

Multiple Choice

Which of the following is true of the APV method and the WACC method?

• A)The APV method discounts only one set of cash flows,whereas the WACC method discounts separately the cash flows of the project and the cash flows of the tax savings or other debt subsidies.
• B)The WACC method would treat the cash flows from the tax breaks in a similar manner to the incremental cash flows generated by subsidized loans,whereas the APV method draws a distinction between subsidies related to project?s financing and those not related to financing.
• C)Both methods use the unlevered cash flows generated by the project as their starting point,assuming that the project is financed entirely by equity.
• D)Both methods account for benefits from debt financing by adjusting the discount rate.

---

Definitions:

Anemia

A condition in which the blood doesn't have enough healthy red blood cells to carry adequate oxygen to the body's tissues.

Preterm Newborns

Newborns born before the completion of 37 weeks of pregnancy.

Frequent Blood Sampling

The process of regularly collecting blood samples from a patient for diagnostic or monitoring purposes.

Congenital Hypothyroidism

A condition present at birth where the thyroid gland produces insufficient amounts of thyroid hormone, crucial for growth and metabolism.