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A Firm Should Continue to Invest in Capital Budgeting Projects

Question 41

Multiple Choice

A firm should continue to invest in capital budgeting projects until its marginal cost of capital is equal to the:


A) net present value (NPV) of the last project purchased.
B) internal rate of return (IRR) of the first project purchased.
C) marginal return (internal rate of return, IRR) generated by the last project purchased.
D) combined cost of all of the projects purchased.
E) weighted average cost of capital for all of the projects purchased.

Correct Answer:

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