The Cost of Capital May Be Different for a Foreign

question 24

True/False

The cost of capital may be different for a foreign project than for an equivalent domestic project because foreign projects may be more or less risky.

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Definitions:

Marginal Revenue Product

The additional revenue generated by employing one more unit of a factor, such as labor, keeping other factors constant.

Resource

An asset or input that is utilized in the production of goods and services, such as labor, capital, and raw materials.

Units

Basic quantities or measurements used to express a variable or to quantify the elements in an analysis.

Employed

Refers to individuals who are currently working in a paid job or running a business.