Kate is the CFO of a major firm and has the job of assigning discount rates to each project that is under consideration.Kate's method of doing this is to assign an incrementally higher rate as the risk level of the project increases over that of the current firm.Likewise,she assigns lower rates as the risk level declines.Which one of the following approaches is Kate using to assign the discount rates?

Question

Quizplus · Accepted Answer

Kate is using the subjective approach to assign discount rates because she is assigning rates based on her own judgment of the risk level of each project.

Kate Is the CFO of a Major Firm and Has