1. Project risk versus portfolio risk Consider a firm to be a portfolio of several projects. The contribution of a project's risk to the firm's risk will be referred to as the beta risk of This is different from the total risk involved in a particular project itself. The risk associated with the uncertainty of a project's future cash flows is called risk. Consider the following case: Gino owns a smart phone application development company. The cost involved in developing a new application is around $10,000. Given is 24%. However, if it is successful, each app can generate profits up to $100,000. Gino's company develops more than 12 applications a year and records the entire development cost of the application as a loss if any app is not successful. Gino's company can expect to earn return. Classifying the 76% failure rate as " : industry, this example shows that: \begin{tabular}{l|l} A project with high projec & 24,533.33% \\ \hline A project with high projec & 15,800.00% \\ \hline 164.00% \end{tabular} Classifying the 76% failure rate as "high risk" in the industry, this example shows that: A project with high project risk may have high beta or systematic risk. A project with high project risk may not have high beta or systematic risk. doing well and decrease when there is an economic slowdown. The beta of the resilis development business, and the businesses are positively correlated. With this expansion, the beta of Gino's firm is likely to methods of evaluating project risk. When comparing two projects, when is the standard deviation of a project's cash flows an appropriate measure of project risk? When the two projects have different project outlay When the two projects have the same project outlay