The Higher the Risk Element in a Project, the

question 118

Multiple Choice

The higher the risk element in a project, the

• A) more attractive the investment.
• B) higher the net present value.
• C) higher the cost of capital.
• D) higher the discount rate.

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Definitions:

Price

The amount of money required to purchase a good or service, often determined by factors like demand, supply, and market competition.

Utility Function

A representation or model used in economics to quantify the satisfaction or happiness a consumer derives from consuming goods and services.

Income

Payment obtained, regularly, for services rendered or from capital investments.

Preferences

In economics, refers to the subjective tastes and desires of consumers that influence their choices and demands.