In present value analysis, most companies require a rate of return that is higher than the discount rate because of the degree of risk compared with investing in a bond.

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This statement is true. The rate of return that a company requires for an investment typically reflects the risk associated with that investment. Investing in a bond is generally considered to be a low-risk investment, while other investments may carry higher risk. Therefore, companies typically require a higher rate of return for riskier investments than the discount rate used in present value analysis.

In Present Value Analysis, Most Companies Require a Rate of Return