The estimated cost of capital financial managers use for efficiency projects tends to be higher than the cost of capital used to evaluate new projects.

Name: The estimated cost of capital financial managers use for efficiency projects tends to be higher than the cost of capital used to evaluate new projects.
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Question

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Financial managers typically use the same cost of capital for both efficiency and new projects, as it reflects the firm's overall cost of financing.

The Estimated Cost of Capital Financial Managers Use for Efficiency