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The firm will become less valuable. The firm will accept too many relatively safe projects. The firm will accept too many relatively risky projects. How
The firm will become less valuable. The firm will accept too many relatively safe projects. The firm will accept too many relatively risky projects. How do managers typically deal with within-firm risk and beta risk when they are evaluating a potential project? Quantitatively Subjectively Consider the case of another company. Davis 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
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