Which of the following scenarios have the potential to cause problems for the in
ID: 2626416 • Letter: W
Question
Which of the following scenarios have the potential to cause problems for the increasing cost of funds algorithm with indivisible assets?
Question 5 options:
There are three sources of funds and not just two.
An asset that requires funds from two sources is rejected by the criteria, but the next asset, with a smaller IRR, can be funded with just the lower MARR funds.
The indivisible assets are compound assets, such as, asset A is both a truck and a lift instead of just a truck.
The MARR of retained earnings is 0%.
Two of the sources of funds have the same MARR.
There are three sources of funds and not just two.
An asset that requires funds from two sources is rejected by the criteria, but the next asset, with a smaller IRR, can be funded with just the lower MARR funds.
The indivisible assets are compound assets, such as, asset A is both a truck and a lift instead of just a truck.
The MARR of retained earnings is 0%.
Two of the sources of funds have the same MARR.
Explanation / Answer
The MARR of retained earnings is 0%.
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