Whether the financing costs in the evaluation process are relevant at the firm level or not. Stand Alone Principle: Standalone principle is a principle of accepting or rejecting a future project that is separated from other projects or has a separate entity from other projects by comparing the risk of the securities related to the project. Finance Costs: Finance costs are the costs that have been incurred by a company to obtain the finance for the company. It is the cost occurred to borrow the capital form the external resources that helps the company to purchase the assets.

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Chapter 6, Problem 6CQ

Summary Introduction

To evaluate: Whether the financing costs in the evaluation process are relevant at the firm level or not.

Stand Alone Principle:

Standalone principle is a principle of accepting or rejecting a future project that is separated from other projects or has a separate entity from other projects by comparing the risk of the securities related to the project.

Finance Costs:

Finance costs are the costs that have been incurred by a company to obtain the finance for the company. It is the cost occurred to borrow the capital form the external resources that helps the company to purchase the assets.

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