Consider the Following Two Statements: (I) to Calculate the Cost

Consider the following two statements: (i) To calculate the cost of capital using the levered cash flow approach, we need a risk free rate.
(ii) The levered cash flow approach is only correct if the firm is borrowing to finance an investment.

A) (i) is correct and (ii) is incorrect.
B) (ii) is correct and (i) is incorrect.
C) Both (i) and (ii) are correct.
D) both (i) and (ii) are incorrect.
E) leverage does not impact betas.