The Rates of Return, or Costs, That a Firm Must

Multiple Choice

The rates of return, or costs, that a firm must pay to raise funds to invest in capital budgeting projects are determined by the:

A) marginal revenue generated by projects in which the firm invests.
B) investors who purchase the firm's stocks and bonds in the financial markets.
C) internal rate of return the firm earns on its investments.
D) cash flows generated by the investment in capital budgeting projects.
E) firm's dividend payout ratio.