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25 May, 20:12

A project's opportunity cost of capital is:

Multiple Choice:

O the return that shareholders could expect to earn by investing in the financial markets.

O the return earned by investing in the project.

O equal to the average return on all company projects.

O designed to be less than the project's IRR.

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  1. 25 May, 22:47
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    the return that shareholders could expect to earn by investing in the financial markets

    Explanation:

    Projects are financed from a joined pool of funds. The Cost of Capital is the minimum return that a project must offer before it can be accepted and this is determined by the return that shareholders could expect to earn by investing in the financial markets.
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