Which of the following is the most relevant measure of risk for capital budgeting purposes?

Question

Quizplus · Accepted Answer

The contribution-to-firm risk is the most relevant measure of risk for capital budgeting purposes because it considers the impact of the project on the entire firm rather than just the project itself. This measure takes into account the potential benefits and drawbacks of the project and how it will affect the overall risk profile of the firm. Unsystmatic risk is also important to consider, but it only relates to the specific project and not the firm as a whole. Project standing alone risk and symbiotic risk are not widely used measures of risk in this context.

Which of the Following Is the Most Relevant Measure of Risk