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Which of the following is not consistent with the Certainty Equivalent Approach when dealing with project risk? a. It uses the Risk Free Rate (rf)
Which of the following is not consistent with the Certainty Equivalent Approach when dealing with project risk?
a. | It uses the Risk Free Rate (rf) to discount the cash flows | |
b. | The cash flows are adjusted in the numerator | |
c. | It is based on the guaranteed amount that an investor would accept as an alternative | |
d. | It uses the firms Cost of Capital (k) to discount the cash flows |
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