Compute appropriate risk-adjusted discount rate
Course:- Finance Basics
Reference No.:- EM1364756

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A company is evaluating two systems. The company's revenue stream will not be affected by the choice of the systems, the projects are being evaluated by finding the PV of each set of costs. The company's required rate of return is 13% and it adds or subtracts 3 percentage points to adjust for project risk differences. System A is judged to be a high-risk project (it might end up costing much more to operate than is expected. The appropriate risk-adjusted discount rate that should be used to evaluate System A is?

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