The CEO of Easygo Ltd measured the profitability of a project as the difference between its 15% return and the interest rate on the loan used to finance it. Why is this approach wrong?

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Because interest rates should never be considered in project evaluation

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Because the CEO should have used the bank overdraft rate

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Because the return should be compared with the cost of equity only

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Because the return should be compared with the WACC, owing to the pooling of funds principle

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The CEO of Easygo Ltd measured the profitability of a project as the difference ...

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