Question

What types of decisions would be made easier through determining the effective financing rate?

What types of decisions would be made easier through determining the effective financing rate?

Homework Answers

Answer #1

There are many decisions which are made easier by selecting effective financing rate

1. Selecting the best projects among many alternative.

2. Finding the current value of the firm.

3. Finding the value of other financial products.

4. Selecting between different financial decisions based of effective financing rate like in between leasing or taking loan.

5. Comparing the projects based on opportunity cost and effective financing rate.

6. Selecting projects in overseas.

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