Capital budgeting projects until marginal cost of capital

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Reference no: EM131934253

1. All else equal, a firm that purchases raw materials on credit will experience:

A a decrease in trade credit with a given increase in purchases

B no change in trade credit with a given increase in purchases

C an increase in trade credit with a given increase in purchases

D no change in trade credit with a given decrease in purchases

E an increase in trade credit with a given decrease in purchases

2. A firm should continue to invest in capital budgeting projects until its marginal cost of capital is:

A equal to the net present value (NPV) of the last project purchased

B equal to the internal rate of return (IRR) of the first project purchased

C equal to the marginal return generated by the last project purchased

D equal to the cash generated by the last project purchased

E equal to the weighted average cost of all the projects purchased

Reference no: EM131934253

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