12) There is a high probability that the cost of capital for a foreign project will

a) be no greater than the cost of capital for a comparable domestic project

b) exceed the cost of capital for a comparable domestic project

c) be the same as the cost of capital for a comparable domestic project

d) exceed the investors required rate of return

19) Walt Disney Company is contemplating a new theme park somewhere in Southeast Asia. However, it is concerned about cannibalizing sales of Tokyo Disneyland.

Walt Disney should:

a) not be concerned because if it doesn't build another theme park, another competitor will certainly do so

b) decrease the amount of transfer pricing between its subsidiaries

c) not be concerned because the odds are that it will generate enough additional sales to offset any cannibalization that does take place

d) be concerned because cannibalization is a real threat