The correct answer is: C. marginal rate.
The marginal rate is the additional cost of borrowing one more unit of capital. It is also known as the incremental cost of capital or the marginal cost of debt. The marginal rate is important because it is the rate that should be used to discount future cash flows when making investment decisions.
The historical rate is the interest rate that was paid on a loan in the past. It is not relevant to the current cost of borrowing because the interest rate environment has changed since the loan was taken out.
The embedded rate is the interest rate that is built into a financial instrument, such as a bond. It is not relevant to the current cost of borrowing because it is the rate that was agreed upon when the instrument was issued.
In conclusion, the marginal rate is the correct answer because it is the rate that should be used to discount future cash flows when making investment decisions.