1. Why does WACC increase and IRR decrease as the capital
budget increases? Are there any...
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Finance
1. Why does WACC increase and IRR decrease as the capitalbudget increases? Are there any steps management can take toreverse these trends?
2. How should a company prioritize all of its capital projectopportunities? In responding invoke the various methodologieslearned this week and how to use them for ranking projects.
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Answer1 WACC is the weighted average cost of capital is the average cost of capital in which each source of capital is given weights IRR It is a capital budgeting technique used to know the profitability of the project As a company needs capital it raises it from the sources that provide capital at lower cost of capital Company will choose the lowest cost of
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