Top Posters
Since Sunday
5
o
5
4
m
4
b
4
x
4
a
4
l
4
t
4
S
4
m
3
s
3
New Topic  
Ace123440 Ace123440
wrote...
Posts: 102
Rep: 0 0
2 years ago
Swanson & Sons has two separate divisions. Each division is in a separate line of business. Division A is the largest division and represents 65 percent of the firm's overall sales. Division A is also the riskier of the two divisions. Division B is the smaller and least risky of the two. When the company is deciding which of the various divisional projects should be accepted they should

▸ allocate more funds to Division A since it is the largest of the two divisions.

▸ fund all of Division B's projects first since they tend to be less risky and then allocate the remaining funds to the Division A projects that have the highest net present values.

▸ allocate the company funds to the projects with the highest net present values based on the firm's weighted average cost of capital.

▸ assign different discount rates to each project and then select the projects with the highest net present values.

▸ fund the highest net present value projects from each division based on an allocation of 65 percent of the funds to Division A and 35 percent of the funds to Division B.
Textbook 
Corporate Finance Online

Corporate Finance Online


Edition: 2nd
Authors:
Read 56 times
1 Reply
Replies
Answer verified by a subject expert
christmasnuggetchristmasnugget
wrote...
Posts: 76
Rep: 2 0
2 years ago
Sign in or Sign up in seconds to unlock everything for free
More solutions for this book are available here
1

Related Topics

Ace123440 Author
wrote...

2 years ago
Helped a lot
wrote...

Yesterday
This calls for a celebration Person Raising Both Hands in Celebration
wrote...

2 hours ago
this is exactly what I needed
New Topic      
Explore
Post your homework questions and get free online help from our incredible volunteers
  946 People Browsing
Related Images
  
 205
  
 20
  
 805
Your Opinion
Do you believe in global warming?
Votes: 370