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Marcos Corp. uses risk-adjusted discount rates according to the risk of projects and divisions. The company adjusts up 3% for riskier projects or divisions and
Marcos Corp. uses risk-adjusted discount rates according to the risk of projects and divisions. The company adjusts up 3% for riskier projects or divisions and adjusts down 2% for less risky ones. They divide projects into 3 categories, high, average, and low, and do the same to divisions. If the discount rate is 10% for average risk projects of average risk divisions, what would be the discount rate for low risk projects of low risk divisions?
a. 6%
b. 4%
c. 5%
d. 7%
e. 8%
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