Understanding risks that affect projects and the Impact of risk consideration Yatta Net international has manufocturing, distribution, retail, and consulung divisions. Projects undertaken by the manufacturing and distribution divisions tend to be low risk projects, because these divisions are well established and have predictable demand. The company started its retail and consulting divisions wathin the last year, and it is unknown if these divisions wil be profitable. The cempary knew that opening these new divisions would be risky, bot its management believes the divisions have the potential to be extremely profitabie under favorabie market conditions. The company is currently using its WACC to evaluate new projects for all divisions. If Yatta Net tnternational does not risk-adjust its discount rate for specific projects properly, which of the following is likely to oceur over time? Check an that apply. The firm will acoept too many relatively safe projects. The firm will become less valuable. The firm wil accept too many relatively ritky projects. How de manegers 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. Which of the following stotements about these projects' risk is correct? Check all that apply. Project B has more stand-alone risk than Project A. Project A has more corporate risk than Project B. Project A has more stand-alone risk than Project B. Project B has more market risk than Project A