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Assume a nonnormal project (one with an inflow followed by a series of outflows) is considered to have above-average risk. Which of the following statements best reflects the proper risk adjustment?

The discount rate is decreased to reflect the greater risk.

The discount rate is increased to reflect the greater risk.

The discount rate is left unchanged.

The discount rate is halved.

The discount rate is doubled.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92419063

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