Question 1.)Your employees haveestimated the net present value of project X to be $1.2 million.Their report says that they have not accounted for risk, but thatwith such a large NPV, the project should be accepted since even arisk-adjusted NPV would likely be positive. You have the finaldecision as to whether to accept or reject the project. What isyour decision Show transcribed image text Your employees have estimated the net present value of project X to be $1.2 million. Their report says that they have not accounted for risk, but that with such a large NPV, the project should be accepted since even a risk-adjusted NPV would likely be positive. You have the final decision as to whether to accept or reject the project. What is your decision

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter13: Capital Budgeting: Estimating Cash Flows And Analyzing Risk
Section: Chapter Questions
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1.)Your employees haveestimated the net present value of project X to be $1.2 million.Their report says that they have not accounted for risk, but thatwith such a large NPV, the project should be accepted since even arisk-adjusted NPV would likely be positive. You have the finaldecision as to whether to accept or reject the project. What isyour decision

Show transcribed image text Your employees have estimated the net present value of project X to be $1.2 million. Their report says that they have not accounted for risk, but that with such a large NPV, the project should be accepted since even a risk-adjusted NPV would likely be positive. You have the final decision as to whether to accept or reject the project. What is your decision

 

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