If a business can borrow all the money it needs for a capital investment project at 7% interest, is 7% the appropriate cost of capital for that project?

Ans: No, because the cost of capital depends on the risk of the project, not the source of the money

We have to treat it as a debt financing, and take into consideration the risk we are taking. then the appropriate cost of capital for the project is how much interest we will be paying annually plus the risk. That means7% is NOT the appropriate cost of capital for that project!

if7% is the bank interest per month, so we have to calculate the margin of the project which should cover7% monthly plus the mean loan amount plus a good margin for the investor