All True/FalseThe risks inherent in undertaking a project derive from uncertainty.The higher the perceived risk in an investment, the higher the expected rate of return.The minimum rate of return a firm must earn on its projects is determined by its cost of capital.A cost of capital can be determined for each element of capital.The rate of return a firm must earn on its projects is unrelated to the return its investors expect.The weighted average cost of capital is more appropriate to use as the minimum rate of return on projects than the cost of capital of an individual capital element.All risks inherent in undertaking a project are associated with project factors.All projects have elements of risk and reward.An entity is the sum total of projects undertaken by the firm.If the expected return from a project just covers the direct cost of the project, the project is economically feasible.The graphic representation of the risk-reward relationship is positively sloped.Capital budgeting is a major responsibility for financial management.When used in evaluating capital projects, the weighted average cost of capital is called the hurdle rate.If an undertaking is risk-free, no return would be expected.
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