According to the internal rate of return method, a firm should accept a project if the ________
A) internal rate of return is less than the cost of capital
B) internal rate of return exceeds the cost of capital
C) cost of capital exceeds the internal rate of return
D) internal rate of return exceeds the firm's cost of debt
E) internal rate of return exceeds the firm's cost of equity
B
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When a lender loans a borrower 100% of the purchase price of a house, and the loan is not government-related, the lender would be best protected by:
A. a downturn in the economy B. low monthly payments C. appreciation D. a low interest rate
As the financial leverage multiplier increases, this may result in ________
A) an increase in the net profit margin and return on investment, due to the decrease in interest expense as debt decreases B) an increase in the net profit margin and return on investment, due to the increase in interest expense as debt increases C) a decrease in the net profit margin and return on investment, due to the increase in interest expense as debt increases D) a decrease in the net profit margin and return on investment, due to the decrease in interest expense as debt decreases