A. TRUE / FALSE QUESTIONS Enter "True" or "False" on the blank preceding each question. 1. The implementation of capital budgeting projects that have a rate of return above the firm's "weighted average cost of capital" (WACC) will decrease the value of the firm. 2. The following three projects are "mutually exclusive" relative to one another; (1) installing air conditioning in the production plant; (2) acquiring the firm of a raw material supplier; (3) purchasing a new computer system. 3. The cost of common stock equity may be measured using either the Gordon constant growth valuation model or the "Security Market Line" (SML) equation. 4. Use of the Security Market Line (SML) equation to measure the cost of common stock equity differs from the Gordon constant growth valuation model in that it directly considers the firm's risk via use of the firm's beta in the SML equation