Is it possible for a firm to project an after-tax profit on an investment but to still
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Question:
Is it possible for a firm to project an after-tax profit on an investment but to still consider the project unacceptable due to insufficientreturn?
A)No, if the project is expected to earn an after-tax profit, it would always beacceptable.
B)No, this is not how the sufficiency of return is calculated, so such a project would always be acceptable.
C)Yes, because merely achieving an after-tax profit is not the hurdle for acceptability of aproject.
D)Yes, because the appropriate criterion, which is the equity risk premium, may be lower than the project's expectedreturn.
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