QUESTION 14 The reason for using the risk-free rate for the time value of money in PWSA analysis is: The risk profile of the payoffs of the strategic initiative is unknown; scenarios are used to take account of the uncertainty because there is no way uncerrtinty can be translated into a quantifable risk The time value of money does not include inflation Strategic initiatives are typically funded using retained earnings, so that it is best and most appropriate to use WACC as a measure of the real return of the strategic investment