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Asset replacement

This topic has 1 reply, 2 voices, and was last updated 4 years ago by John Moffat.

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October 10, 2020 at 4:12 pm #588533
phuongmore
Participant
- Topics: 132
- Replies: 128
Dear sir, please help me to explain why the following sentences is wrong:” asset replacement decision require relevant cash flow to be discounted be the after tax cost of debt”.Is it require to use cost of capital to discount? But I do not understand the reason why.
October 11, 2020 at 10:26 am #588583
John Moffat
Keymaster
- Topics: 57
- Replies: 54702
We always use the overall WACC when we are appraising projects. I do explain the reasons is my free lectures on the cost of capital.
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