GK
ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Brand
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Cost of capital
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Product quality
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Capital structure
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Detailed explanation-1: -The concept of cost of capital can be used to evaluate the financial performance of top management. This can be done by comparing the actual profitability of the investment project undertaken by the firm with the overall cost of capital.
Detailed explanation-2: -There are several capital budgeting analysis methods that can be used to determine the economic feasibility of a capital investment. They include the Payback Period, Discounted Payment Period, Net Present Value, Protability Index, Internal Rate of Return, and Modied Internal Rate of Return.
Detailed explanation-3: -Company leaders use cost of capital to gauge how much money new endeavors need to generate to offset upfront costs and achieve profit. They also use it to analyze the potential risk of future business decisions. Cost of capital is extremely important to investors and analysts.