Total Project Risk Is

question 68

Multiple Choice

Total project risk is

• A)the contribution a project makes to the risk of the firm
• B)measured by the correlation coefficient
• C)the chance that a project will perform different from expectations
• D)measured by the project's beta

---

Definitions:

Net Working Capital

The difference between a company's current assets and current liabilities, indicating short-term financial health and operational efficiency.

Accounts Payable

Money owed by a company to its creditors for goods or services that have been delivered but not yet paid for.

Shortage Costs

Expenses incurred when demand exceeds supply, including lost sales and the cost of expedited orders or production to meet demand.

Restrictive Financing Policy

A financial strategy that involves maintaining lower levels of current assets or using more short-term financing to fund those assets, aiming to reduce costs but increase risk.