The cost of capital used to compute the present value of a project should be the rate that can be earned on:

the questions are missing:

The answer is:

a. a financial asset of comparable risk.

The cost of capital (Re) represents the opportunity cost of investing in a certain project and leaving behind other alternative projects. E.g. if we can invest in two different securities, A or B, and security A has a much lower risk than project B, then the Re or discount factor for calculating the present value of project A will be lower than the discount factor used to determine the present value of project B.

A corporation that has a diversified investment portfolio, uses different costs of capital when analyzing potential investments, e.g. investing in Swiss securities is not the same as investing in Argentinean securities, since Argentina is currently facing a great recession and has recently defaulted again on its national debt (third time in 20 years).

i would say iii (3) because in order to compare a price you have to use as a reference other near stores because it's its

hope i explained myself

answer; realistic job preview;