Adjustment for risk, Adjustment for risk

Adjustment for risk

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Reference no: EM1343578

Adjustment for risk

This is a multiple choice question:

Risk in a revenue-producing project can best be adjusted for by

a. Ignoring it.

b. Adjusting the discount rate upward for increasing risk.

c. Adjusting the discount rate downward for increasing risk.

d. Picking a risk factor equal to the average discount rate.

e. Reducing the NPV by 10 percent for risky projects.

Reference no: EM1343578

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