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

Question

Quizplus · Accepted Answer

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 and takes into account the diversification benefits of the firm's existing portfolio. Project standing alone risk, symbiotic risk, and unsystematic risk are all important factors to consider, but they do not provide a comprehensive view of the risk associated with a specific project.

Which of the Following Is the Most Relevant Measure of Risk