How can different degrees of risk among projects be factored

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Question 1: How can a company utilize tools like NPV and IRR to optimize decisions about which projects to invest in? Why is this particularly important when cash flows are earned over many years, and especially when the cash flows are uneven?

Question 2: How can different degrees of risk among projects be factored into the decision?

Question 3: How so we optimize the value of our proposed capital investments if

(a) there is a set maximum amount of capital dollars to be invested vs.

(b) there is no theoretical maximum and potentially all projects which "make financial sense" could be funded?

Reference no: EM132556747

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