6. What is the difference between the corporate cost of capital and a project cost of capital?

7. What is meant by the term capital rationing? From a purely financial standpoint, what is the optimal capital budget under capital rationing?

8. Santa Roberta Clinic has estimated its corporate cost of capital to be 11 percent. What are reasonable values for the project costs of capital for low-risk, and high-risk projects?

9. Under what conditions should a business estimate divisional costs of capital?

10. Describe the qualitative approach to risk assessment. Why does this approach, which does not rely on numerical data, work?