Correct Answer:
B. The average cost of all sources of capital weighted by their proportions in the capital structure
WACC is used as the discount rate for projects of average risk.
November 13, 2026 · Accounting and Finance MCQs, Financial Management & Analysis MCQs
The weighted average cost of capital (WACC) is:
Related MCQs
Repayment of a long-term bank loan is classified as a cash flow from:
A.
Operating activities
B.
Investing activities
C.
Non-cash activities
D.
Financing activities
Correct answer is:
D. Financing activities
Do you agree with this answer?
An external confirmation of accounts receivable balances mainly provides evidence about:
A.
Valuation of inventory
B.
Completeness of payables
C.
Compliance with tax law
D.
Existence of the receivables
Correct answer is:
D. Existence of the receivables
Do you agree with this answer?
A contingent liability is:
A.
Always recognized as a liability
B.
Not recognized in the statements but disclosed unless the possibility of outflow is remote
C.
Always ignored
D.
An asset of uncertain value
Correct answer is:
B. Not recognized in the statements but disclosed unless the possibility of outflow is remote
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The journal entry for goods sold on credit is:
A.
Debit Sales, Credit Accounts Receivable
B.
Debit Cash, Credit Sales
C.
Debit Purchases, Credit Accounts Payable
D.
Debit Accounts Receivable, Credit Sales
Correct answer is:
D. Debit Accounts Receivable, Credit Sales
Do you agree with this answer?
Line-item budgeting is a budget format that:
A.
Lists expenditure by inputs such as salaries and supplies
B.
Links spending to results
C.
Starts from zero each year
D.
Excludes salaries
Correct answer is:
A. Lists expenditure by inputs such as salaries and supplies
Do you agree with this answer?
The normal balance of a revenue account is:
A.
Debit
B.
Zero
C.
Depends on the auditor
D.
Credit
Correct answer is:
D. Credit
Do you agree with this answer?
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