Best accounted for by which of the procedures

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Reference no: EM131937362

1. The relative risk of a proposed project is best accounted for by which of the following procedures?

a. Ignoring risk because project risk cannot be measured accurately.

b. Adjusting the discount rate upward if the project is judged to have below-average risk.

c. Picking a risk factor equal to the average discount rate.

d. Adjusting the discount rate upward if the project is judged to have above-average risk.

e. Reducing the NPV by 10% for risky projects.

2. You have a zero coupon bond par = $50000 and interest rate = 5 percent and Time = 3 years

true false - after the third year you will receive $52500

true false - after the second year you will receive $0

true false - after the second year you will receive $50000

true false - after the second year you may sell the bond to someone else

Reference no: EM131937362

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