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

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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] · Answer 1 · 2023-06-22T18:49:59+03:00

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.