Question

In the ________________ method, expected cash flows are used in the valuation process, and the risk...

In the ________________ method, expected cash flows are used in the valuation process, and the risk adjustment is made to the discount rate. Question 20 options: Certainty equivalent Risk-adjusted discount rate (RADR) Sensitivity analysis Scenario analysis

Homework Answers

Answer #1

Risk-Adjusted Discount Rate because under Risk-adjusted discount rate method, we use the expected cash flow values, and the risk adjustment is made to the denominator of the NPV equation

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