Which of the Following Procedures Best Accounts for the Relative

question 36

Multiple Choice

Which of the following procedures best accounts for the relative risk of a proposed project?

• A) Adjusting the discount rate downward if the project is judged to have above-average risk.
• B) Reducing the NPV by 10% for risky projects.
• C) Picking a risk factor equal to the average discount rate.
• D) Ignoring risk because project risk cannot be measured accurately.
• E) Adjusting the discount rate upward if the project is judged to have above-average risk.

---

Definitions:

Cancer-Related Death

A death primarily attributed to cancer and its complications, reflecting the terminal stage of the disease.

Healthy Weight

A weight range considered to reduce the risk of health problems, based on factors like height, gender, and age.

Healthy Diet

A nutritional regimen that provides the necessary nutrients for growth, health, and good condition.

High-Fat Diet

A diet that contains a high proportion of fats, often associated with increased health risks.