Read the following passage and answer the question.

Background:

Green Innovations Ltd. is an emerging company specializing in renewable energy solutions, such as solar panels and wind turbines. The company has seen steady growth in its first few years, and management is now focusing on long-term financial strategies to fuel further expansion. 

Green Innovations plans to invest $15 million in new manufacturing facilities and R&D for product innovation in the upcoming fiscal year. The company's CFO is working on a financial plan to ensure the funds are allocated efficiently while maintaining a healthy cash flow. The company has also forecasted a 20% increase in sales due to growing demand for sustainable energy solutions.

Currently, Green Innovations is reinvesting its profits into growth and diversification projects. It is allocating fim's capital to different projects with long term implications for the business.

The company's current composition of capital consists of 60% equity and 40% debt. The management is considering adjusting the mix to increase debt in order to take advantage of low-interest rates.

Green Innovations is focused on minimizing its cost of capital to ensure that future investments yield strong returns while keeping debt levels manageable.

What financial metric will Green Innovations focus on to assess investment opportunities?

Cost of capital

The correct answer is option 2- Cost of capital.

In the case study, it is stated that: "Green Innovations is focused on minimizing its cost of capital to ensure that future investments yield strong returns while keeping debt levels manageable." This clearly indicates that cost of capital is the key financial metric the company is focusing on to assess investment opportunities and ensure efficient allocation of funds. Cost of capital is the most relevant metric for evaluating the profitability of potential investments.