Why Is the Cost of Capital Is Considered an Opportunity

Multiple Choice

Why is the cost of capital is considered an Opportunity Cost?

A) The interest is an expense that allows for the opportunity of undertaking the project.
B) The value of the capital invested in the business is the cost to the business of not undertaking a different project of similar risk.
C) The returns to the business represent the opportunity for which the capital invested is the cost.
D) The business is indifferent to investing in any project that provides similar returns for a similar level of risk.
E) The returns to investors supplying the capital must equal to or greater than that which could be had from other projects of similar risk.