Is a forecasted 8% return in the encabulator business necessarily better than a 4% safe return on short-term U.S. government securities? Justify why or why not?

a. Is a forecasted 8% return in the encabulator business necessarily better than a 4% safe return on short-term U.S. government securities? Justify why or why not?

b. Is F&H’s opportunity cost of capital 4%?

c. How in principle should the CFO determine the cost of capital?

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