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Mars Ltd's accountant evaluated the new venture at 10%, the after-tax cost of th...

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Mars Ltd's accountant evaluated the new venture at 10%, the after-tax cost of the loan used to finance it. What is the error?

The project should be evaluated at the cost of equity only

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The project should be evaluated at the target WACC (20%), not at the cost of the specific financing used

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There is no error

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The project should be evaluated at the pre-tax cost of debt of 13.89%

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