Question

What must the evaluator examine in relation to cost of capital and NPV?

a.

Future cost of capital

b.

Past cost of capital

c.

Predicted cost of capital during the period of revenue generation

d.

Fixed cost of capital

Posted under IC 89 Management Accounting

Answer: (c).Predicted cost of capital during the period of revenue generation Explanation:The evaluator must examine the prevalent or predicted cost of capital in the market during the period of revenue generation.

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Q. What must the evaluator examine in relation to cost of capital and NPV?
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