Understanding risks that affect projects and the impact of risk consideration WSP Inc. is involved in a wide range of unrelated projects. The company will pursue any project that it thinks will create value for its stockholders Consequently, the risk level of the company's projects tends to vary a great deal from project to project. If WSP Inc does not nisk-adjust its discount rate for specific projects properly, which of the following is likely to occur over time? Check all that apply. The firm will accept too many relatively safe projects. The firm will become less valuable The firm will accept too many relatively risky projects Generally, a positive correlation exists between a project's retums and the returns on the firm's other assets. If this correlation is stand alone risk will be a good proxy for within firm risk. high Consider the case of another company, Kim Printing is evaluating two mutually exclusive projects. They both require a $3 million low Ft today and have expected NPVs of $600,000Management conducted a full risk analysis of these two projects, and the results are shown beller Generally, a positive correlation exists between a project's returns and the retums on the firm's other assets. If this correlation is alone risk will be a good proxy for within-firm risk. stand Consider the case of another company, Kim Printing is evaluating two mutually exclusive projects. They both require a $3 million investment today and have expected NPVs of $600,000. Management conducted a full risk analysis of these two projects, and the results are shown below. Project A Project B $240,000 $360,000 Risk Measure Standard deviation of project's expected NPVS Project beta Correlation coefficient of project cash flows (relative to the firm's existing projects) 0.9 0.7 0.7 0.5 Which of the following statements about these projects' risk is correct? Check all that apply, Project A has more stand-alone risk than Project B. Project B has more corporate nsk than Project A. Project B has more market nsk than Project A Project A has more market risk than Project B