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Homework answers / question archive / You are working on your supply expense budget

You are working on your supply expense budget

Finance

You are working on your supply expense budget. You are going to need different assumptions for capitated vs. fee for service visits.

As the risk of a project or investment increases, the required rate of return or discount rate you choose should . . .
 
  • A. Increase
  • B. Decrease
  • C. Stay the same
  • D. Follow market CD or government bond rates
True
False

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Answer : Correct Option is (A.) Increase

Reason :

If the  risk of a project or investment increases, the required rate of return or discount rate you choose should increase because as the required rate of return is to evaluate the project therefore it should be adjusted according to the risk.

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