09-20-2005, 09:19 AM
Assuming the funding of project does not change company's gearing; WACC can be used as a benchmark to compare with ARR as a decision point to accept or reject the project (albeit with caveats)
A more symmetric benchmark would be ROCE (return on capital employed)of the entity.
Remember, in the end, the most important criteria is that the project should increase shareholder's wealth.
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http//s4.invisionfree.com/AccountingWorld/
A more symmetric benchmark would be ROCE (return on capital employed)of the entity.
Remember, in the end, the most important criteria is that the project should increase shareholder's wealth.
===========================================
http//s4.invisionfree.com/AccountingWorld/
