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Check My Work A firm is considering a new project whose risk is greater than the risk of the firm's average project, based on all
Check My Work
A firm is considering a new project whose risk is greater 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?
a Increase the estimated iRR of the project to reflect its greater risk.
b Increase the cost of cap tal used to evaluate the project to reflect its higherthanaverage risk.
cignore the rick dfferentail it the project woutd amount to only a small fraction of the firm's total assets.
d increase the estimated tip. of the project to reflect its grester risk.
e Reject the propert becaure its acceptence would ncresse the firm' s risk.
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