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Question
Using the weighted average cost of capital as the required rate of return for every project willA) cause a firm to reject projects that should have been accepted.
B) cause a firm to accept projects that were too risky.
C) result in maximization of shareholder wealth.
D) A and B above
Answer
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Related questions
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Current assets would usually NOT include
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B) marketable securities.
C) accounts receivable.
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Dazzly Diamond Corp. called for credit at the Home Alone Bank of Paris, TX. The terms included a $35,000 maximum loan with interest of 1 percent over prime, and the agreement also requires a 15% compensating balance throughout the year. The prime rate is currently 12 percent.
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B) $84,000
C) $90,000
D) $94,000