The cost of capital assigned to an individual project should be that rate which:
A) Corresponds to the risk level of the firm's division which has responsibility for the project.
B) Corresponds to the source of the funds used for the project.
C) Corresponds to the latest pre-tax cost of debt and equity for the overall firm.
D) Is the firm's current weighted average cost of capital.
E) Considers both the nature and the characteristics of the actual project.
Correct Answer:
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