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dexar [7]
2 years ago
13

The general rule for using the weighted average cost of capital (WACC) in capital budgeting decisions is to accept all projects

with Multiple Choice rates of return greater than or equal to the WACC. rates of return less than the WACC. rates of return equal to or less than the WACC. positive rates of return.
Business
1 answer:
MrRissso [65]2 years ago
6 0

The general rule is accepting all projects whose rates of return is greater than or equal to the WACC for a capital budgeting decisions

<h3>What is a weighted average cost of capital?</h3>

This means the rate that a firm is expected to pay on average to all its security holders to finance its assets.

Because the weighted average cost of capital represent the firm's opportunity cost, then, it is used by people to evaluate investment opportunities.

Therefore, the Option A is correct.

Read more about WACC

<em>brainly.com/question/25566972</em>

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The principle of diversification tells us that: Select one: a. concentrating an investment in two or three large stocks will eli
jonny [76]

Answer:

The answer is "Option E".

Explanation:

Please find the complete question in the attached file.

Varied portfolios and mixes of diversified assets get a different relationship, eliminating uncontrolled danger and only risk premium. Its total risk is a combination of non - systematic and systematic risks. Therefore, the diversification principle reduces some portion of the risk profile, and that is why distributing an investment across a range of varied assets reduces some of the risk profile.

7 0
3 years ago
Lori wants to give her daughter $25,000 in 8 years to start her own business. How much should Lori invest today, at an annual in
Dovator [93]

The amount of money that Lori should invest today is $13,506.72.

<h3>How much should Lori invest today?
</h3>

In order to determine the amount of money that Lori should invest today, the present value of $25,000 has to be determined. Present value is the sum of discounted cash flows.

Present value = $25,000 / (1.08^8) = $13,506.72

To learn more about present value, please check: brainly.com/question/26537392

#SPJ1

7 0
2 years ago
You own a portfolio which is valued at $8.5 million and which has a beta of 1.3. You would like to create a riskless portfolio b
Stells [14]

Answer:

The answer is option (c)  Short 34 contracts

Explanation:

Solution:

Given that

The information about the portfolio is as stated below:

The value of the portfolio = $8.5 million

The beta = 1.3

The future contract of S&P price = $1310

The size of contract  = 250

Now,

To hedge the risk completely, the desired beta is =0

Thus,

The number of contracts is calculated as follows:

The Number of contract = (desired beta - portfolio beta)*portfolio value/(future price*contract size)

So,

The number of contracts = (0 - 1.3)*8500000/(1310*250) = -34

Then,

The negative sign means  it is going short.

Hence,

A total of 340 contracts must be short.

8 0
3 years ago
Your employer is trying to select from a list of possible capital projects. The projects, along with their cost and benefits, ar
den301095 [7]

Answer:

Project 1, 2 and 3 will be selected

Total NPV of these projects will be $2,190,000

Explanation:

Availability of capital = 1 million

Minimum 2 projects should be selected

Project 2 and 4 cannot be selected together.

Value of project =  NPV / Cost

P1 = 720,000 / 300,000 = 2.4

P2 = 780,000 / 260,000 = 3

P3 = 690,000 / 215,000 = 3.2

P4 = 700,000 / 240,000 = 2.9

P5 = 510,000 / 295,000 = 1.7

8 0
3 years ago
I forgot my user name and password. Can u help me?
kykrilka [37]
User name and password on what app?
5 0
3 years ago
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