Select the best answer

17. WeCare HMO is evaluating a new project. It has a coefficient variation (CV) of 5, while the HMO's average project has a CV of 2-3. The business's corporate cost of capital is 10 percent, and the typical adjustment for the project risk is the three percentage points. What is the project cost of capital? (Hint: CV is a measure of project risk)

a. 7%

b. 10%

c. 13%

d. 16%

e. 19%

18. Which of the following statements about project cash flow estimation is incorrect?

a. inflation effects should be included

b. The effects on a business's other projects should be included

c. Opportunity costs should be included

d. Sunk costs should be included

e. Strategic value should be included