Firms current risk based on any method for assessing risk

Assignment Help Financial Management

Reference no: EM13846971

General Forge and Foundry Co. is considering investing in a project in which the risk is greater than the firms current risk based on any method for assessing risk. Which of the following should management do when evaluating this project?

A. To take the higher risk level into account, they will need to increase the IRR of the project

B. To take the higher risk level into account, they will need to use a discount rate that is greater than the cost of capital to evaluate the project

C. They should always reject the project, because it will increase the firm's risk level

D. To take the higher risk level into account they will need to increase the NPV of the project

Reference no: EM13846971

Questions Cloud

What challenges exist with state homeland security strategy : How does the National Strategy for Homeland Security (NSHS) apply to state governments and emergency managers and what challenges and barriers exist with regard to state homeland security strategy that are not present at the federal level?

Describe all the different stages of cognitive : In a multi-paragraph essay, describe all the different stages of cognitive and psychosocial development throughout your lifespan. Be sure to provide examples to illustrate the thoughts, emotions, and behavior typical of each stage. Include details fr..

Explain why network operating systems were phased : Explain why network operating systems were phased out when distributed operating systems gained popularity.

What life events are most likely to trigger a stress disorde : Stress can be the root cause of psychological disorders. Name four symptoms shared by acute and posttraumatic stress disorders. What life events are most likely to trigger a stress disorder?

Firms current risk based on any method for assessing risk : General Forge and Foundry Co. is considering investing in a project in which the risk is greater than the firms current risk based on any method for assessing risk. Which of the following should management do when evaluating this project?

Determine the amount of pension plan assets at fair value : The following information relates to Schmidt Sausage Co.'s defined benefit pension plan during the current reporting year: Required: Determine the amount of pension plan assets at fair value on December 31.

Examine the influence of diversity on human services : Examine the influence of diversity on human services delivery issues, such as problem identification, symptom expression, and help-seeking behavior

What spiritual issues surrounding a disaster : What spiritual issues surrounding a disaster can arise for individuals, communities, and health care providers? Explain your answer in the context of a natural or manmade disaster. How can a community health nurse assist in the spiritual care of the ..

Understanding of the concept of cost capital : Based on your understanding of the concept of cost capital, which of the following statements are valid?

User Account

All Pages