a A firm invests in a project that is expected to earn a return of 12 percent If the appropriate cost of capital is also 12 percent, did the firm make the right decision Explain b What is the impact on the firm if it accepts a project with a negative NPV ...

a We would normally argue that a firm should only accept projects in whi ...

a. A firm invests in a project that is expected to earn a return of 12 percent.

Question:

a. A firm invests in a project that is expected to earn a return of 12 percent. If the appropriate is also 12 percent, did the firm make the right decision? Explain.
b. What is the impact on the firm if it accepts a project with a negative NPV?

Cost Of Capital
Cost of capital refers to the opportunity cost of making a specific investment . Cost of capital (COC) is the rate of return that a firm must earn on its project investments to maintain its market value and attract funds. COC is the required rate of...