The cost of capital may be different for a foreign project than for an equivalent domestic project because foreign projects may be more or less risky.

Question

Quizplus · Accepted Answer

The risk associated with foreign projects may be different due to factors such as political instability, currency risk, and cultural differences. This may affect the cost of capital for a foreign project, making it potentially higher or lower than for an equivalent domestic project.

The Cost of Capital May Be Different for a Foreign