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?