In the present value model, risk is generally incorporated into

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In the present value model, risk is generally incorporated into the discount rate. This is because the discount rate reflects the time value of money and also incorporates the risk factor. The higher the risk, the higher the discount rate, and the lower the present value of future cash flows. Therefore, the discount rate is adjusted to incorporate the risk associated with the investment.

In the Present Value Model, Risk Is Generally Incorporated into