The cost of capital is a hurdle rate. Is this statement true? Why or why not?

Q: Briefly explain why we refer to the opportunity cost of capital, instead of just “cost of capital”…

A: A cost of capital is referred to as the opportunity cost of capital as it is an opportunity for us…

Q: What is the Remaining Capital Value (RCV)?

A: Salvage value is defined as the remaining value of the fixed asset that is expected to be recovered…

Q: What is the Capital Asset Pricing Model (CAPM)?What are the assumptions that underlie themodel?

A: The CAPM is an equilibrium model which stipulates the association among required rates of return and…

Q: What's the difference between the capital asset pricing model and modified capital assset pricing…

A: Capital Asset Pricing Model CAPM describes the relationship between systematic risk and expected…

Q: Would the NPVs change if the cost of capitalchanged?

A: The NPV (Net Present Value) is entirely based on the value of the weighted average cost of capital…

Q: What is the cost of capital rate in the question?

A: Cost of capital is the WACC of the project. WACC is equal to weighted average cost of capital. WACC…

Q: Write the capitalized-cost equation?

A: Answer: Capitalized cost is well-defined as the present value of an annual cost constant over an…

Q: what is the answer for Jimin Parl, Capital?

A: Lets understand the basics. As per balance sheet equation, total assets are always equal to total…

Q: How does a cost-efficient capital market help reduce the prices of goods and services?

A: A market where the companies are registered and issue the long-term debt and equity securities to…

Q: the Capital Asset Pricing M

A: Explanation : In simple words, Capital asset pricing model for valuing the cost of capital contains…

Q: What is capital rationing, what conditions lead toit, and how should it be dealt with?

A: Capital budgeting is a process in which capital projects are assessed in terms of their viability…

Q: why is Capital Asset Pricing Model relevant

A: The Capital Asset Pricing Model, popularly known as CAPM, is an important model that is often used…

Q: What is the crossover rate, and how does its value relative to the cost of capital determinewhether…

A: Crossover rate is a rate where net present values of two mutually exclusive projects are equal to…

Q: Explain the problem of a capital-investment?

A: For the financing of capital investment, generally, the company considers operating cash flow of its…

Q: Why do we use the overall cost of capital for investment decisions even when only one source of…

A: The question is based on the concept of Financial planning.

Q: What does the empirical evidence say about capital structure theory? What are the implications…

A: Introduction: Capital structure relates to financing of the overall activities and development of a…

Q: What is the trade-off theory of capital structure?How does it differ from MM’s theory?

A: Trade off theory of capital structure: This is a theory in which the company decides on the ratio of…

Q: What is the crossover rate, and how does it interact with the costof capital to determine whether or…

A: The rate at which the net present value (NPV) of 2 ventures is equivalent is the crossover rate…

Q: What are the Factors That Complicate Capital Investment Analysis

A: Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Q: Why does net working capital appear with both negative andpositive values?

A: Working capital also known as net working capital is nothing but the difference between the current…

Q: Why is the cost of capital sometimes referred to as a “hurdle rate”?

A: Cost of capital is the cost of financing a business, investment or a project. Cost of capital is…

Q: purpose for capital analysis

A: Capital analysis is the study of capital structure of a business entity.

Q: The rate of return, discount rate, hurdle rate, and opportunity cost of capital all have the same…

A: Rate of return is the minimum rate of return that an investor expects while investing in a project.…

Q: What is a “required rate of return”? Why is it called the “cost ofmoney” or the “price of money”?

A: The required rate of return can be calculated by two methods, 1) Gordan's growth model  Gordan's…

Instruments of Foreign Exchange Market

Foreign exchange is a worldwide market in which one nation’s currency is converted into another nation’s currency. In further terms, exchanging of nations currency with foreign currencies. Foreign exchange happens at a specified rate which is termed the foreign exchange rate. The exchange rates are not constant continuously changing as they are derived by market forces of supply and demand. Widely used foreign currencies are the United States- dollar, Euro, Japanese Yen, British pound, and Australian dollar. US- dollar is the most denominated foreign currency. The Euro to US dollar is a widely used currency pair in the forex market as these two currencies represent the world’s enormous economy. Forex trade is simple as exchanging currencies at the bank. The main players of forex markets are the central banks, financial institutions, intermediaries, investments banks, and other banks. Central Bank is the supreme player who decides the currency value of their own nation on the forex market. Mostly foreign exchange-traded at FX market (forex market) when tourists’ visits a foreign country, import, and export happens between two countries.