n August 2001, Woodsen Inc. of Pittsburgh, PA considered the development of a large subsidiary in Greece. In response to the September 11, 2001 terrorist attack on the U.S., its expected cash flows and earnings from this acquisition were reduced only slightly. Yet, the firm decided to retract its offer because of an increase in its required rate of return on the project, which caused the NPV to be negative. Explain why the required rate of return on its project may have increased after the attack.