For this discussion, focus on the role of a company's cost of capital on capital budgeting decisions. In a recent study the NYU Stern School of Business reported the average cost of capital for a company $($as of $2022)$ in the Airlines Industry was about $4\mathrm{.}83\%.$ So for every $$1$ raised through all sources of financing, an average company in that industry gives out $($or pays$)$ almost $5$ cents to its investors $($i$.$e$.,$ bondholders, banks, common stockholders$).$

Lets say that a major airlines company $($maybe the company you chose in Discussion #$1)$ has a cost of capital similar to an average company in its industry. So we will assume the cost of capital is about $4\mathrm{.}83\%$ for a specific airlines. Keep in the mind the role of the cost of capital, how managers use that number and whether that number is changing for the company. Discuss in one or two paragraphs if you think the following potential capital projects would be undertaken $($i$.$e$.,$ invested in$)$ by this average airlines company. Include why or why not the project should be undertaken, defining what the cost of capital number measures.

Technology Upgrades Project with projected Rate of Return of $3\mathrm{.}8\%$; Refurbishing of several fleets of different plane models $($sizes$)$ with projected Rate of Return of $5\mathrm{.}5\%$; and Development of new, larger design aircraft with projected Rate of Return of $7\%.$

Total of $18$ points. Discussion of Cost of Capital meaning$/$use and Changes for an average airlines company $-4$ points, Accept$/$Reject decisions of Each Project and Reasons $-12$ points, Organization and Grammar $2$ points.