For capital budgeting purpose, the firm should consider retained earnings as the first source of capital (i.e.,
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Question:
For capital budgeting purpose, the firm should consider retained earnings as the first source of capital (i.e., use these funds first) because retained earnings is the money earned and saved by the firm for future use and thus cost nothing.
True
False
Other things held constant, an increase in the cost of capital will result in a decrease in a project’s IRR.
True
False
Related Book For
Entrepreneurial Finance
ISBN: 978-1305968356
6th edition
Authors: J. Chris Leach, Ronald W. Melicher
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