Which of the Following Statements About Project Standing Alone Risk

question 103

Multiple Choice

Which of the following statements about project standing alone risk is true?

• A) It ignores the fact that much of the risk of a project will be diversified away as the project is combined with the firm's other projects.
• B) It ignores the cash flows that are associated with a project that occur beyond the payback period.
• C) It takes into consideration the effects of diversification of the firm's shareholders.
• D) It provides the best measure of project risk for a large, widely-held company.

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