Why Should a Risk Averse Manager Select One Project Over

question 98

Multiple Choice

Why should a risk averse manager select one project over another when both projects generate the same NPV?

• A)Because the manager prefers the project which has more variance in its cash flows.
• B)Because the manager prefers the project with the higher IRR.
• C)Because the manager prefers the project with less risky cash flows.
• D)Because the manager prefers the project which has higher standard deviation in its cash flows.

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Definitions:

Time Management

The process of organizing and planning how to divide one's time between specific activities to increase effectiveness, efficiency, or productivity.

Forecasting

The process of making predictions about future events or trends based on current and historical data analysis.

Planning And Controlling

Involves setting objectives, establishing strategies to achieve those objectives, and then guiding the organization in the execution of these plans while monitoring progress and making adjustments as needed.

Anticipating Problems

The ability to foresee and prepare for potential issues before they occur.