MGT502 - Organizational Behaviour
Question(s) similar to the following:
Why weighted average cost of capital (WACC) should be used as discount rate foranalyzing the financial viability of a project?
Question 1: Why weighted average cost of capital (WACC) should be used as discount rate foranalyzing the financial viability of a project?
Answer: Suggest Edit
The WACC is the minimum return that a company must earn on an existing asset base tosatisfy its creditors, owners, and other providers of capital, or they will invest elsewhereBroadly speaking, a company's assets are financed by either debt or equity. WACC is theaverage of the costs of these sources of financing, each of which is weighted by itsrespective use in the given situation. By taking a weighted average, we can see how muchinterest the company has to pay for every dollar it finances.
A firm's WACC is the overall required return on the firm as a whole and, as such, it isoften used internally by company directors to determine the economic feasibility of aproject . It is the appropriate discount rate to use for cash flows with risk that is similar tothat of the overall firm.
Similar Questions:
Question 2: Why weighted average cost of capital (WACC) should be used as discount rate foranalyzing the financial viability of a project?
Answer: Suggest Edit
The WACC is the minimum return that a company must earn on an existing asset base tosatisfy its creditors, owners, and other providers of capital, or they will invest elsewhereBroadly speaking, a company's assets are financed by either debt or equity. WACC is theaverage of the costs of these sources of financing, each of which is weighted by itsrespective use in the given situation. By taking a weighted average, we can see how muchinterest the company has to pay for every dollar it finances.
A firm's WACC is the overall required return on the firm as a whole and, as such, it isoften used internally by company directors to determine the economic feasibility of aproject . It is the appropriate discount rate to use for cash flows with risk that is similar tothat of the overall firm.
Past Papers of MGT502 - Organizational Behaviour
Question 1: Why weighted average cost of capital (WACC) should be used as discount rate foranalyzing the financial viability of a project?
Answer: Suggest Edit
The WACC is the minimum return that a company must earn on an existing asset base tosatisfy its creditors, owners, and other providers of capital, or they will invest elsewhereBroadly speaking, a company's assets are financed by either debt or equity. WACC is theaverage of the costs of these sources of financing, each of which is weighted by itsrespective use in the given situation. By taking a weighted average, we can see how muchinterest the company has to pay for every dollar it finances.
A firm's WACC is the overall required return on the firm as a whole and, as such, it isoften used internally by company directors to determine the economic feasibility of aproject . It is the appropriate discount rate to use for cash flows with risk that is similar tothat of the overall firm.
Similar Questions:
Question 2: Why weighted average cost of capital (WACC) should be used as discount rate foranalyzing the financial viability of a project?
Answer: Suggest Edit
The WACC is the minimum return that a company must earn on an existing asset base tosatisfy its creditors, owners, and other providers of capital, or they will invest elsewhereBroadly speaking, a company's assets are financed by either debt or equity. WACC is theaverage of the costs of these sources of financing, each of which is weighted by itsrespective use in the given situation. By taking a weighted average, we can see how muchinterest the company has to pay for every dollar it finances.
A firm's WACC is the overall required return on the firm as a whole and, as such, it isoften used internally by company directors to determine the economic feasibility of aproject . It is the appropriate discount rate to use for cash flows with risk that is similar tothat of the overall firm.
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