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Which of the following statements is(are) true? I. The optimal capital budget is the annual investment...

Which of the following statements is(are) true? I. The optimal capital budget is the annual investment in long term assets that maximizes the value of the firm II. If a firm can receive financing for all projects, firm should accept all projects with positive NPVs and all mutually exclusive projects with higher NPVs.

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Answer #1

Ans Both the statements are true.

I. The optimal capital budget is the annual investment in long term assets that maximizes the value of the firm TRUE

II. If a firm can receive financing for all projects, firm should accept all projects with positive NPVs and all mutually exclusive projects with higher NPVs. TRUE

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