Let's say the company evaluates that the projected annual return of the new factory will only be 3%. Because the WACC is higher than the expected return of the project, the project will not be profitable as the amount earned from the factory does not exceed the cost of sourcing ...
WACCis a financial metric that calculates a company’s overall cost of capital, blending the costs of both debt and equity based on their proportion in the company’s capital structure. It represents the minimum return a business must earn to satisfy its investors and creditors. The basic formu...
直接负责的主管人员和其他直接责任人“是指对安全生产设施或安全生产条件不符合国家规定负有直接责任的生产经营单位负责人、管理人员、实际控制人、投资人以及其他对安全设施或者安全条件负有管理、维护职责的人员”。（ ）
The optimal capital structure seeks to minimize the weighted average cost of capital (WACC), which represents the average cost of all the sources of capital used by the company. The WACC takes into account the cost and proportion of debt and equity in the capital structure. Companies with a ...
but that does not mean it’s without its faults. One major issue with using WACC is that the information required to calculate it is not always readily available. Because of this, individual investors may use simpler methods to measure the risk and value of an investment, such as theprice-...
Describe the six primary capital budgeting decision criteria. What are their pros and cons? A) What would be the effect of ignoring the time value of money when making risk management decisions? B) What does the net present value of a loss cont...
The WACC formula seems to imply that debt is cheaper than equity that is, that a firm with more debt could use a lower discount rate. Does this make sense? Explain briefly. What are the ratios used to evaluate long-term solvency? Explain what the term "long-...
Economic or market moats represent the long-termbusinessdefensibility. Or how long abusinesscan retain its competitive advantage in themarketplaceover the years. Warren Buffet who popularized the term “moat” referred to it as a share of mind, opposite to market share, as such it is the cha...
Economic or market moats represent the long-termbusinessdefensibility. Or how long abusinesscan retain its competitive advantage in themarketplaceover the years. Warren Buffet who popularized the term “moat” referred to it as a share of mind, opposite to market share, as such it is the cha...
An IRR that's higher than theweighted average cost of capital (WACC)suggests that thecapital projectis a profitable endeavor and vice versa. An IRR that's lower than the WACC suggests that the project won't be profitable. The IRR rule works like this: ...