The cost of capital for a new project: Multiple Choice is determined by the overall risk level of the firm. should be applied as the discount rate for all other projects considered by the firm. is dependent upon the firm's overall capital structure. is dependent upon the source of the funds obtained to fund that project. depends upon how the funds raised for that project are going to be spent.

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Business

Kaden

3 March, 05:33

The cost of capital for a new project: Multiple Choice is determined by the overall risk level of the firm. should be applied as the discount rate for all other projects considered by the firm. is dependent upon the firm's overall capital structure. is dependent upon the source of the funds obtained to fund that project. depends upon how the funds raised for that project are going to be spent.

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Jordan Mccarthy · Answer 1

Depends on how the funds raised for that project are going to be spent.

Explanation:

The cost of financing a project solely either through equity or debt is referred to as the cost of capital.

It can also be defined as the rate of return that a sum of money would have earned if invested into another business with equal risk.

It is useful in setting budget while evaluating investment opportunities.

One major factor in determining the cost of capital is the related risks to an investment. The higher the risk, the higher the cost of capital. That means that how the raised funds for the project are going to be spent is a major determinant of the cost of capital.