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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 otherventures 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 likely to occur over time? Check all that apply. The firm will reject too many relatively safe projecte. The firm will make poor capiral budgeting declsions that could jeopardise the long run viability of the company. The firm will becorree less risky. Generally, a positive correqotion exists between a project's returns and the returns on the firm's other assets. If this correlation is stand-alone thik will be a good proxy for within-firm fisk. Consider the case of another company. Davis Printing is evaluating two matually exclusive projects. They both reqiaire a $1 milion investment today. aind have expected NPVt of $200,000, Management conducted a full risk analysis of these two projects, and the results are shown below. Consider the case of another company. Davis Printing is evaluating two mutually exclusive projects. They both require a $1 million investment today and have expected NPV's of $200,000. Management conducted a full risk analysis of these two projects, and the resuits are shown below. Which of the following statements about these profects' risk is correct? Check all that apply: Project A has more corporate risk than Project B. Project B has more stand-alone risk than Project A. Project B has more market risk than Project A. Project A has more stand-alone risk than Project B

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