Kate is the CFO of a major firm and has the job of assigning discount rates to each project under consideration.Kate's method of doing this is to assign an incrementally higher rate as the risk level of the project increases and a lower rate as the risk level declines.Kate is applying the ___ approach.

Question

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Kate is using the subjective approach, which involves adjusting the discount rate based on the perceived risk level of each project.

Kate Is the CFO of a Major Firm and Has