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In general, a capital project A that has the same positive cash flows buthigheroverall riskthan Project B will have a higher required rate of return
In general, a capital project A that has the same positive cash flows buthigheroverall riskthan Project B will have a higher required rate of return (discount rate) than Project B and therefore thepresent valueof the forecasted positive project cash flows will be higher, lower, or the same.
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