JR's Is Preparing to Start a New Project in an Industry

JR's is preparing to start a new project in an industry that differs significantly from its current operations.JR's has searched and found the beta of a firm that is a good fit as a pure play for this new project.Given this good fit,why might JR's assign a higher beta to the project than the beta of the pure play?

A) JR's should assign a project beta that is based on the average of JR's and the pure play firm's betas.
B) The expected project revenues may be less cyclical than those of the pure play firm.
C) JR's may use less debt in its operations than does the pure play firm.
D) The pure play firm has more experience in the new area than JR's does.
E) The project may incur flotation costs so a higher beta is warranted to offset the additional cost.