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A firm is considering a new project whose risk is less than the risk of the firm's average project, based on all methods for assessing
A firm is considering a new project whose risk is less than the risk of the firm's average project, based on all methods for assessing risk. In evaluating this project, it would be reasonable for management to do which of the following? Decrease the estimated NPV of the project to reflect its greater risk. Decrease the estimated IRR of the project to reflect its greater risk. Ignore the risk differential if the project would amount to only a small fraction of the firm's total assets. Accept the project. since its acceptance would decrease the firm's risk. Decrease the cost of capital used to evaluate the project to reflect its lower-than-average risk
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