Question
A firm is considering the purchase of an asset whose risk is greater than the current risk of the firm, based on any method for
A firm is considering the purchase of an asset whose risk is greater than the current risk of the firm, based on any method for assessing risk. In evaluating this asset, the decision maker should
| a. | Increase the IRR of the asset to reflect the greater risk. | |
| b. | increase the NPV of the asset to reflect the greater risk. | |
| c. | Reject the asset, since its acceptance would increase the risk of the firm. | |
| d. | Increase the required rate of return used to evaluate the project to reflect the higher risk of the project. |
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Personal Finance
Authors: Vickie L Bajtelsmit
2nd Edition
111959247X, 9781119592471
