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When a risk manager is choosing between two alternative, mutually exclusive methods of financing losses that have different patters of expenditures, but don't materially affect
When a risk manager is choosing between two alternative, mutually exclusive methods of financing losses that have different patters of expenditures, but don't materially affect the variability of any of the firm's cash flows, the appropriate cost of capital for discounting these expenditures is the
a. risk free rate
b. opportunity cost
c. opportunity cost of capital, adjusted upward to reflect aditional risk
d. opportunity cost of capital, adjusted downward to reflect reduced risk
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