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    Weighted Average Cost Capital (WACC)

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    1) Why is WACC important to an organization?

    2) What impact does WACC have on capital budgeting and structure?

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    Solution Preview

    The "Hurdle Rate" or the "Discount Rate" represented by the 'Weighted Average Cost of Capital' (WACC) plays an important role in deciding the Net Present Value (NPV) of a project. Calculating the NPV is an important task since it allows the decision maker to make sound investment decisions; if the NPV of a project is positive, then the project is profitable and should be taken, ...

    Solution Summary

    'Weighted Average Cost of Capital' (WACC) is emphasized.