During a presentation in February 2001, the CFO of Palm, Inc. was asked how her firm assesses its cost of capital. In response, she stated that Palm computes its cost of capital “from time to time.” As far as computing the expected return on individual projects, she stated: “we do try to do this once in a while, but probably not as much as you might think we do.” Discuss this remark in the context of the chapter.
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