FIN 534 RANK Imagine Your Future /fin534rank.com FIN 534 RANK Imagine Your Future /fin534rank.com | Page 93

FIN 534 Week 5 DQ 1
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Week 5 discussion 1
Based on what you discovered in the e-Activity, make at least two
recommendations for regarding how your selected company should
approach its capital budgeting. Explain the reasoning behind your
recommendations.
A capital budgeting analysis conducts a test to see if the benefits (i.e.,
cash inflows) are large enough to repay the company for three things:
(1) the cost of the asset, (2) the cost of financing the asset (e.g., interest,
etc.), and (3) a rate of return (called a risk premium) that compensates
the company for potential errors made when estimating cash flows that
will occur in the distant future.
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FIN 534 Week 5 Quiz 4
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