Let's pick up the discussion on capital budgeting which was started last week. Capital budgeting is essential because funds are not unlimited and investing in projects is how companies grow. We wll address two topics: 1 Why does WACC increase and IRR decrease as the capital budget increases? Are there any steps management can take to reverse these trends? 2 How should a company prioritize all of its capital project opportunities?
Let's pick up the discussion on capital budgeting which was started last week. Capital budgeting is essential because funds are not unlimited and investing in projects is how companies grow. We wll address two topics: 1 Why does WACC increase and IRR decrease as the capital budget increases? Are there any steps management can take to reverse these trends? 2 How should a company prioritize all of its capital project opportunities?
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter13: Capital Budgeting: Estimating Cash Flows And Analyzing Risk
Section: Chapter Questions
Problem 8Q
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![Let's pick up the discussion on capital budgeting which was started last week. Capital budgeting is
essential because funds are not unlimited and investing in projects is how companies grow. We will
address two topics:
1 Why does WACC increase and IRR decrease as the capital budget increases? Are there any steps
management can take to reverse these trends? 2. How should a company prioritize all of its capital project
opportunities?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe5d01b98-3da3-454b-929d-a9562289f0a5%2F8c897960-e730-4e33-a908-bb7b5fc07f53%2Fdhlbexk_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Let's pick up the discussion on capital budgeting which was started last week. Capital budgeting is
essential because funds are not unlimited and investing in projects is how companies grow. We will
address two topics:
1 Why does WACC increase and IRR decrease as the capital budget increases? Are there any steps
management can take to reverse these trends? 2. How should a company prioritize all of its capital project
opportunities?
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