Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. 1. why does wacc increase and irr decrease as the

1. Why does WACC increase and IRR decrease as the capital budget increases? Are there any...

80.2K

Verified Solution

Question

Finance

1. Why does WACC increase and IRR decrease as the capitalbudget increases? Are there any steps management can take toreverse these trends?
2. How should a company prioritize all of its capital projectopportunities? In responding invoke the various methodologieslearned this week and how to use them for ranking projects.

Answer & Explanation Solved by verified expert
3.7 Ratings (368 Votes)
Answer1 WACC is the weighted average cost of capital is the average cost of capital in which each source of capital is given weights IRR It is a capital budgeting technique used to know the profitability of the project As a company needs capital it raises it from the sources that provide capital at lower cost of capital Company will choose the lowest cost of    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Geometry
1.2K views

In AABC, centroid D is on median AM AD=x+4 and DM = 2x - 4.Find...

Basic Math
1.2K views

Total plasma volume is important in determining the required plasma component in blood replacement therapy for...

Chemistry
1.2K views

please answer questions 3&4 thanks Q• Identify components of glycoconjugate structures and classify them based on open and...

Psychology
1.2K views

20 – Describe the elements of \"Arousal Theory\".

Psychology
1.2K views

What are the threats to external validity? How could each threat affect you as a researcher?...

Mechanical Engineering
1.2K views

rewrite the below-working principle of hydraulic power steering system in your own word with out missing...

Basic Math
1.2K views

A piece of art is in the shape of an equilateral triangle with sides of...

Accounting
1.2K views

Compare the percentages of consumers in three segments who watch original programs from video...

Accounting
1.2K views

Patel and Sons Incorporated uses a standard cost system to apply factory overhead costs to...

Accounting
1.2K views

During Heaton Company's first two years of operations, it reported absorption costing net operating income...

Accounting
1.2K views

1. A fashion designer wants to produce a new line of clothes. In the production...

Accounting
1.2K views

Why does the financial services industry rely on policies, procedures, and codes of practice regarding...