If a company has to pay interest of 14% on long-term debt, then its cost of capital is 14%. Do you agree? Explain.
13–9 What is meant by an investment project’s internal rate of return? How is the internal rate of return computed?
13–10 Explain how the cost of capital serves as a screening tool when using (a) the net present value method and (b) the internal rate of return method.
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