Posted: September 22nd, 2016

Generally, if the projected return of a potential project is higher than a firm’s current Weighted Average Cost of Capital (WACC), then the firm should ACCEPT the project.

Generally, if the projected return of a potential project is higher than a firm’s current Weighted Average Cost of Capital (WACC), then the firm should ACCEPT the project. Conversely, they should REJECT the project if the potential return is lower than the expected rate of return on a portfolio of all the firm’s current securities (WACC).
a) true
b) false

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