The cost of capital represents a. the capital outlay required in a project. b. the initial investment of a project. c. the IRR of the investment. d. the minimum ROI of the investment.
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The cost of capital represents
a. the capital outlay required in a project.
b. the initial investment of a project.
c. the
d. the minimum
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Solved in 2 steps
- What is the MOST important variable of the financial planning process? Select one: a. The costs b. The capacity of the fixed asset c. The pro forma income statement d. The sales forecastDescribe the concept of rate of return based on the return on invested capital in terms of a project?Which of the following methods of capital budgeting indicates the time period required to recover the investment? a. Internal rate of return b. Accounting Rate of return c. Payback period d. Net present value
- In the initial investment of a project you must include the working capital.Weighted average cost of capital (WACC) reflects the average cost of all capital components proportional to their use in the overall cost of the project. true or false?Calculate the accounting rate of return for project A and B.
- Relate the idea of cost of capital to the opportunity cost concept. Is the cost of capital the opportunity cost of project money?How to make capital investment choices based on the internal rate of return (IRR).Cash flows that are directly associated with a project are called O sunk costs. terminal costs. incremental cash flows. current cash flows.
- The difference between APV approach, NPV approach and Weighted Average Cost of Capital approach to estimating the value of project.The weighted average cost of capital is used to determine whether or not a project should be done. true falseWhich of the following methods of capital budgeting uses the average annual profits for evaluation of projects? a. Accounting Rate of return b. Internal rate of return c. Net present value d. Payback period
