Which of the following statements is true?

Multiple Choice

If the new project is riskier than the firm's existing projects, then it should be charged a higher cost of capital.

If the new project is riskier than the firm's existing projects, then it should be charged a lower cost of capital.

If the new project is riskier than the firm's existing projects, then it should be charged the firm's cost of capital.

The new project's risk is not a factor in determining its cost of capital.