Overview
Instructions
The summary should be approximately 250-500 words. In order to qualify as substantive, the post should further the discussion by adding a new supportive fact or continuing the conversation with a follow up question (reasoning for the question included in the post). Please include proper citations in your discussion post. Points will be deducted if proper citations are not used.
Week 4 - DQ 1 -
Explain how the decision of the Federal Reserve Bank (Fed) to raise interest rates would be expected to affect each component of the weighted average cost of capital (WACC). What mistakes are commonly made when estimating the WACC, and how do these mistakes arise?
Week 4 - DQ 2
In what types of situations would capital budgeting decisions be made solely on the basis of project's net present value (NPV)? Identify potential reasons that might drive higher NPV for a given project. Substantiate your response by providing an example to explain your thought process.