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Garda Real Estate is involved in commercial real estate ventures throughout the United States. Some of these ventures are much risker than other ventures because

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Garda Real Estate is involved in commercial real estate ventures throughout the United States. Some of these ventures are much risker than other ventures because of market conditions in different regions of the country, e Garcia does not risk-adjust its discount rate for specific ventures property, which of the following is likely to occur over time? Check that apply. The firm's overall risk level will increase The firm will increase in value The firm could potentially reject projects that provide a higher rate of return than the company should require How do managers typically deal with within firm risk and beta risk when they are evaluating a potential project? a Quantitatively Subjectively Consider the case of another company. Turnkey Printing is evaluating two mutually exclusive projects. They both require a $5 milion investment today and have expected NPVs of $1,000,000. Management conducted a full risk analysis of these two projects, and the results are shown below. Subjectively Consider the case of another company. Turnkey Printing is evaluating two mutually exclusive projects. They both require a $5 million investment today and have expected NPVs of $1,000,000. Management conducted a full risk analysis of these two projects, and the results are shown below. Risk Measure Standard deviation of project's expected NPVS Project beta Correlation coeffident of project cash flows (relative to the firm's existing projects) Project Project B $400,000 $600,000 0.9 07 0.6 0.8 Which of the following statements about these projects risk is correct? Check all that only Project B has more stand-aloon risk than Project A. Project has more corporate risk than Project A Project A has more market risk than Project a Project A has more stand-alone risk than Project B. Save & Continue

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