When computing the net present value of the new project

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Reference no: EM131569558

Diversified Industries is a multi-product firm operating in a number of industries. Assume the firm is analyzing a new project that has risks unrelated to those of the current firm's product. When computing the net present value of the new project the cash flows should be discounted using:

a rate based on a beta of one since the firm is well diversified.

a rate based on the firm's current beta.

the risk-free rate of return.

the market rate of return.

a rate commensurate with the risk level of the project.

Reference no: EM131569558

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