Corporate Finance Q85

85Analyst 1: A company’s optimal capital budget occurs at the intersection of the net present value and the internal rate of return profiles. Analyst 2: A company’s optimal capital budget occurs at the intersection of the marginal cost of capital and the investment opportunity schedule. Which analyst’s statements is most likely correct?

Option : B
Explanation : The point at which the marginal cost of capital intersects the investment opportunity schedule is the optimal capital.

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