After arriving at a positive net present value,you recently presented an investment proposal to the investment committee at your company.The committee directs you to recompute the net present value after adjusting the required rate of return for the higher-than-normal riskiness of the proposal.How would you change the rate of return?

Question

Quizplus · Accepted Answer

The committee directs you to recompute the net present value after adjusting the required rate of return for the higher-than-normal riskiness of the proposal. Higher riskiness means higher required rate of return, hence the rate of return should be increased.

After Arriving at a Positive Net Present Value,you Recently Presented