Which of the following statements is true?
Group of answer choices
The adjusted present value (APV) method adjusts for the effect of capital structure for projects that have infinite lives.
The adjusted present value (APV) method is not useful in situations where the financing and investment are tied together, such as leases and leveraged buyouts.
The APV formula is: VL = VU + T*D.
The adjusted present value formula discounts all relevant cash flows. These include not only the conventional cash flows but also those stemming from the choice of financing. In particular, the tax shield associated with debt financing is considered as relevant to the computation.