Using a company's cost of capital to evaluate a project is:

Business

1 answer:

yaroslaw [1]3 years ago

6 0

Answer: Option C

Explanation: In simple words, cost of capital refers to the amount of return that the investor are expecting for tasking the risk of investing in the company. In other words, it is the amount the company has to offer in return to the investors for attaining the capital from the market.

Often the cost of capital is used to evaluate the profitability of the project, that is, if the return in project is higher than the cost of financing it should be taken by the company.

However there are other component while evaluating a project that is risks associated with it. Risk of every projects is different from the other and hence only those project should be evaluated on the basis of cost of capital that is similar to the company's average.

You might be interested in

Tara is shopping at a department store in the mall. before checking out she wants to make sure she brought enough money to pay f

finlep [7]

If Tara bought, sweater $ 52, T-shirt $19, Shoes $68, Jeans $72, Necklace $21, the total would be;
52+19+68+72+21 = 230
But a tax rate of 7% was included,
Thus, 230 × 0.07 = 16.1
Therefore, the total amount is 230+16.1 = 246.1
Hence, the Estimate amount of money that Tara expects to pay is $250

3 0

3 years ago

An employee at falcon security is studying an analysis of data regarding the occurrence of problems and failures with its drones

Rama09 [41]

An employee at Falcon Security is studying an analyst of data regarding the occurrence of problems and failures with its drones camera. Based on the analysis, the employee may schedule maintenance on the equipment Falcon Security is using the analysis to decision making.

6 0

3 years ago

What qualifications are the officials of lilliput expected to have in order to hold high office?

kifflom [539]

The officials are expected to have a very good sense of balance. To achieve the office in the first place, the officials are required to cross a tightrope suspended above the ground, reach the middle, and jump as high as they can without falling or otherwise injuring themselves.

6 0

3 years ago

Prior to 2008, CBS Corp. owned approximately 18% of Westwood One, Inc., which managed the CBS Radio Network. CBS, in turn, manag

olga nikolaevna [1]

Answer and explanation:

The influence a company may have over another when one of them has a number of shares that belongs to the other is determined by the percentage of ownership that the number of shares represent. If its lower than 20%, it is said the company has no influence over the other. From 20% to 50% one company has significant influence over the other. Finally, with more than 50% of the outstanding shares in possession, one company has control over the other.

In that case, CBS Corp. has no influence over Westwood One, Inc. since it owns only 18% of the outstanding shares.

4 0

3 years ago

Which of the following should be included in the acquisition cost of a piece of equipment?

topjm [15]

Answer: All of these choices are correct.

Explanation:

You didn't give the options to the question. The options include:

testing costs prior to placing the equipment into production

transportation costs

installation costs

All of these choices are correct.

Acquisition cost, is the total cost that is recognized by a company on its books for the purchase of an asset. These costs include the transportation cost, installation cost, shipping cost, testing costs, sales taxes, customs fees, etc.

Therefore, based on the explanation, the correct option is All of the choices are correct.

6 0

3 years ago