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WACC can be used in investment appraisal in all the following circumstances, except:   A. Business risk of investment project is similar to business risk of existing operations.     B.    Incremental finance is raised in proportions that preserve existing capital structure.       C.         Required return of existing finance sources is not affected by new investment project.   D.       Use of CAPM will produce a conflicting result

WACC can be used in investment appraisal in all the following circumstances, except:   A. Business risk of investment project is similar to business risk of existing operations.     B.    Incremental finance is raised in proportions that preserve existing capital structure.       C.         Required return of existing finance sources is not affected by new investment project.   D.       Use of CAPM will produce a conflicting result

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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QUESTION 17

  1.  

    WACC can be used in investment appraisal in all the following circumstances, except:

      A.

    Business risk of investment project is similar to business risk of existing operations.

     
      B.

       Incremental finance is raised in proportions that preserve existing capital structure.

     

     
      C.

            Required return of existing finance sources is not affected by new investment project.
      D.

          Use of CAPM will produce a conflicting result 
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