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Which of the following is true? O A firm is worth less than the sum of its projects values. O The projected free cash flows
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Answer #1

The projected free cash flows of a firm equal the sum of the free cash flows from the firm's current and future investments.

because in future cash flows we accouny both from current and new investments.

all other options are wrong because we discount FCFF at WACC not at cost of debt, free cash flows does not only refer to payments of equity such as dividends rather account all capital providers, A firm is usually sum of project values and free cash flow model and NPV are consistenly similar

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