Decker's is a chain of furniture retail stores. Furniture Fashions is a furniture maker and a supplier to Decker's. Decker's has a beta of 1.38 as compared to Furniture Fashion's beta of 1.12. The risk-free rate of return is 3.5 percent and the market risk premium is 8 percent. What discount rate should Decker's use if it considers a project that involves the manufacturing of furniture?

A Use a discount rate based on Furniture Fashions beta and cost of equity

B Use a discount rate based on Deckers beta and cost of equity

C Use a discount rate based on the industry average cost of equity for all Retailers

D Use a discount rate based on the industry average for furniture Wholesalers

E None of the above