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Which of the following are guidelines for the three methods of capital budgeting with leverage? a.      Use...

Which of the following are guidelines for the three methods of capital budgeting with leverage?

a.      Use APV if project’s level of debt is known over the life of the project.

b.     Use APV if project’s level of debt is unknown over the life of the project.

c.      Use Flow-to-equity or WACC if the firm’s target debt to value ratio applies to the project over its life.

d.     Use both APV if project’s level of debt is known over the life of the project; and use Flow-to-equity or WACC if the firm’s target debt to value ratio applies to the project over its life.

e.      Use both APV if project’s level of debt is unknown over the life of the project; and use Flow-to-equity or WACC if the firm’s target debt to value ratio applies to the project over its life.

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Ans d.     Use both APV if project’s level of debt is known over the life of the project; and use Flow-to-equity or WACC if the firm’s target debt to value ratio applies to the project over its life.

Use both APV if project’s level of debt is known over the life of the project; and use Flow-to-equity or WACC if the firm’s target debt to value ratio applies to the project over its life is guideline for the three methods of capital budgeting with leverage.

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