Q1. Which of the following statements is least accurate regarding the marginal cost of capital’s role in determining the net present value (NPV) of a project? A) Projects for which the present value of the after-tax cash inflows is greater than the present value of the after-tax cash outflows should be undertaken by the firm. B) When using a firm’s marginal cost of capital to evaluate a specific project, there is an implicit assumption that the capital structure of the firm will remain at the target capital structure over the life of the project. C) The NPVs of potential projects of above-average risk should be calculated using the marginal cost of capital for the firm.
Q2. Which of the following statements about the role of the marginal cost of capital in determining the net present value of a project is most accurate? The marginal cost of capital should be used to discount the cash flows: A) of all projects the firm is considering. B) if the firm’s capital structure is expected to change during the project’s life. C) for potential projects that have a level of risk near that of the firm’s average project.
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发表于 2009-1-22 09:41
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