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7. within-firm risk and beta risk Understanding risks that affect projects and the impact of risk consideration Yatta Net Intermational has manufacturing, distribution, retall, and

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7. within-firm risk and beta risk Understanding risks that affect projects and the impact of risk consideration Yatta Net Intermational has manufacturing, distribution, retall, and consulting divieions. Projects undertaken by the manufacturing and distribution divisions tend to be low risk projects, becouse these divisions are well established and have predictable demand. The company started its retail and consulting divisions within the last year, and it is unknown if these divieions will be profitable. The company lonew that opening these new divilions would be riaky, but its management believes the divisions have the potential to be extremely profitable under favorable market conditions. The company is currenthy using its wacC to evaluate new projocts for all dividions. If Yatta Net international does not riak-ndjust its diecount rate for spoofic projects proparly, which of the following is tikely to occur over time? Check all that apply. The firm will become leas valuable. The firm will accept too many relatively risicy propects. The firm will acoept too many relatively safe projecta. How do managers typically deal with within firm risk and beta risk when they are evaluntinga potential project? Subjectively Quantitatively How do managers typically deal with within-firm risk and beta risk when they are evaluating a potential project? subjectively Quantitatively Coneider the case of another company. Kim Printing is evaluating two mutually exdusive projects. They both require a $3 million investment today and have expected NeVh of t600,000. Manegement conducted a full risk analysis of these two projects, and the results are shown below. Which of the following statements about these projocts' risk is correct? Chock alf thot opply, Project 8 has more corpornte risk than Project A. Project A has more market risk than Project B. Project B has mare market risk than Project A. Project B thes more stand--alane rikk than Projica A

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