Norris Enterprises, an all$-$equity firm, has a beta of $2\mathrm{.}0.$ The chief financial officer is evalaving a peoject with is $4\%.$ The project being evaluated is riskier than the firm's average project, in terms of bodh its beta rik and its total risk. Which of the following statements is CORRECT?

The project should definitely be aceepted because its expected return $($belone any riak alfuhmena$)$ is greater than its required retam.

The project should definitely be rejocted because its expected return $($before rikk afjutment$)$ is less than its required return.

Riskier$-$than$-$average peojects should have their espected returns increased io neflect leeir higher rilk. Clearly, this would make the project acceptable regardless of the amoent of the afjounewe.

The accept$/$rejoct decisioe depends on the firm's risk$-$adjustment policy. If Nomis policy is no increac the required return on a riskier$-$thas$-$wverage project io $3\%$ over $t_w,$ ben it boold nject He projoct.

Capital bodgeting projects should be evaluated solely on the basis of their weal rivk. Thes, itoufficient information has beca provided to make the aceeptreject decision.