Using the Risk-Adjusted Discount Rate Approach,projects with High Coefficients of Variation

question 62

Multiple Choice

Using the risk-adjusted discount rate approach,projects with high coefficients of variation will have ______ net present values than projects with low coefficients of variation.

• A) somewhat higher
• B) substantially higher
• C) lower
• D) no change on

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Definitions:

Derating Factor

Derating factor involves reducing the maximum operating limit of an electronic component or system to enhance reliability under specific conditions or over time.

Kilovolt-Ampere Capacity

A measurement of electrical power capacity, equivalent to 1,000 volt-amperes.

Fundamental Power Frequency

The primary frequency at which an electrical system is designed to operate, typically 50 or 60 Hz in most regions.

Harmonics

Oscillations at integer multiples of the fundamental frequency in an electrical signal, often considered unwanted distortions.