Asked Nov 12, 2019

true or false?

if we choose to use company's WACC in the calculation of the NPV of a project, we are assuming that the project 1- has the same risk as the average-risk project of the company, and 2- will have constant target capital structure throughout its useful life 


Expert Answer

Step 1

Answer: True

Step 2


NPV is calculated by discounting all the cash inflows and outflows to its present value. If the discount rate used is the wacc of the company, then the process assumes...

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