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Understanding risks that affect projects and the impact of risk consideration Garcia Real Estate is involved in commercial real estate ventures throughout the United States.

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Understanding risks that affect projects and the impact of risk consideration Garcia Real Estate is involved in commercial real estate ventures throughout the United States. Some of these ventures are much riskier than other ventures because of market conditions in different regions of the country. If Garcia does not risk-adjust its discount rate for specific ventures properly, which of the following is llkely to accur over time? Check all that apply. The firm will accept too many relatively risky projects. The firm will accept too many relatively sofe projects. The firm will become less valuable. Generally, a positive correlotion exists between a project's returns and the returns wi the firm's other assets, if this correlotion is , stand-alone risk will be a good proxy for within-firm risk. Consider the case of another company, Kim Printing is evaluating two mutually exdusive projects. They both require a $3 million have expected NPVs of $600,000. Management conducted a full risk analysis of these two projects, and the results are shown bel Which of the following statements about these projocts' risk as correch Chock an that apply. Projed 8 has mare corporate nisk then Praject A, Projoc B has more market risk than Project A Project A has more stand-aleme risk than Fithect Project ts hat more stand-alone risk than trieject A

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