SUSTAINABLE-INVESTING practice question 19 of 35

A mature company has launched a product that reduces customers' electricity usage. This should be incorporated into the company’s discounted cash flow (DCF) analysis by increasing its:

Full set: 802 questions
Answer options
A: cost of capital.
B: revenue projections. Correct answer
C: required rate of return.
Correct Answer:
B. revenue projections.
Explanation

The product’s ability to reduce electricity usage can lead to increased sales and market share, which would improve revenue projections in the company’s DCF analysis. (ESGTextBook[PallasCatFin], Chapter 7, Page 362)

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