Risky projects can be evaluated by discounting certainty equivalent cash flows at the risk-free interest rate.

Name: Risky projects can be evaluated by discounting certainty equivalent cash flows at the risk-free interest rate.
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Quizplus · Accepted Answer

Risky projects can indeed be evaluated by discounting certainty equivalent cash flows, which are adjusted to reflect the project's risk, at the risk-free interest rate. This method allows for the consideration of the project's risk while using a stable discount rate.

Risky Projects Can Be Evaluated by Discounting Certainty Equivalent Cash