Chapter 15: Required Returns and the Cost of Capital MCQs

Multiple-Choice Quiz

Chapter 15:   Required Returns and the Cost of Capital

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1. A single, overall cost of capital is often used to evaluate projects because:

it avoids the problem of computing the required rate of return for each investment proposal.

it is the only way to measure a firm's required return.

it acknowledges that most new investment projects have about the same degree of risk.

it acknowledges that most new investment projects offer about the same expected return.