Ted is trying to decide what cost of capital he should assign to a project.Which one of the following should be his primary consideration in this decision?

Question

Quizplus · Accepted Answer

When determining a cost of capital for a project, the primary consideration should be the risk level of the project. This is because the cost of capital reflects the required rate of return necessary to compensate investors for the risk they are taking on by investing in the project. The other factors listed may also affect the cost of capital to some degree, but they are not the primary consideration.

Ted Is Trying to Decide What Cost of Capital He