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What is advantage of using the marginal cost of capital as a company's average hurdle rate?
Wiki User
∙ 9y ago
Using a hurdle rate can help take the emotion out of defining capital value. This is the advantage of using the marginal cost of capital as the hurdle rate.
Wiki User
∙ 9y ago
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What is The average cost associated with each additional dollar of financing for investment projects is?
the marginal cost of capital "B"
What is the advantage of maintaining an adequate working capital in a small business?
The advantage of maintaining an appropriate amount of working capital is the ability to take advantage of opportunities that exist. If the company doesn't have this money, then the competition may take advantage and gain more market share.
What companys advertise interest free credit cards?
There are not many companys that provide this. But two of them are, Capital One, or Master Card. I think these are great deals. But that is just my opinion. Before making any commitment, go into the bank and get one on one time with an employee.
What is the advantage of issuing stock?
It allows the corporation to raise capital.
What is the advantage and disadvantage of Loan Capital?
it will produce more interest
How does marginal revenue and marginal utility relate to capital?
Marginal revenue/margina utility return from capital represents the benefit of capital. When determining the optimal amount of capital, we must take into account the point when marginal benefit = marginal cost. This optimises profit/utility.
What is the concept of marginal cost of capital?
The marginal cost of capital (MCC) is the cost of the last dollar of capital raised, essentially the cost of another unit of capital raised. As more capital is raised, the marginal cost of capital rises.
How do you compute the Marginal Cost of Capital schedule?
Marginal or incremental cost of capital is cost of the additional capital raised in a given period
If a company's debt is low does marginal cost of capital apply?
Weighted average cost of capital includes cost of debt and cost of equity. Thus irrespective of existing proportion of debt and equity, the marginal cost is always applicable.
What is The average cost associated with each additional dollar of financing for investment projects is?
the marginal cost of capital "B"
Difference between marginal efficiency of investment and marginal efficicency of capital?
MEC is the expected rate of return on capital and MEI is the expected rate of return on investment.
How do you compute marginal cost of capital?
Take the first-order derivative of the cost of capital function.
Conceptual difference between marginal cost of capital and weighted average cost of capital?
WACC is the total average cost of capital to company which is calculated by taking into account the weights of all type of capital existed at a particular date in the capital structure of the company (Equity, Debt, bonds, debentures etc). while the MCC is the incremental cost of capital which comes into existence when fresh capital is raised. It will depend on the type of capital raised, its weight and its cost.
What companys slogan is what is in your wallet?
Capital One credit card.
If marginal revenue product capital increases the demand or supply curve?
Demand.
Why is the marginal cost of capital more relevant to making investment decisions than the historic cost of capital?
because of deprecation
Relation between marginal efficiency of capital and marginal efficiency of investment?
MEC is the highest rate of return expected from an additional unit of capital stock over its cost. MEI is the expected rate of return from one additional unit of investmeni.
