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Author Question: Taussig Technologies is considering two potential projects, X and Y. In assessing the projects ... (Read 121 times)

nods

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on: Aug 7, 2023
Taussig Technologies is considering two potential projects, X and Y. In assessing the projects’ risks, the company estimated the beta of each project versus both the company’s other assets and the stock market, and it also conducted thorough scenario and simulation analyses. This research produced the following numbers:
     
   Project X  Project Y
 Expected NPV$460,000
 $460,000
 Standard deviation (NPV)$130,000  $170,000
 Project beta (versus market)1.5  0.9
Correlation of the project cash flows with cash flows from currently existing projects.
 		Cash flows are not correlated with the cash flows from existing projects.Cash flows are highlycorrelated with the cash flows from existing projects.

Which of the following statements is correct?

​

$350,000
$150,000
$150,000
$350,000
Correlation of the project cash flows with cash flows from currently existing projects.

◦

Project Y has less stand-alone risk than Project X.


◦

Project Y has less corporate (or within-firm) risk than Project X.


◦

Project Y has the same level of corporate risk as Project X. 


◦

Project Y has less market risk than Project X.

Financial Management: Theory and Practice ¦ Brigham, Ehrhardt, Gessaroli, Nason ¦ 4th Edition
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Marked as best answer by nods on Aug 7, 2023

viper01

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Reply #1 on: Aug 7, 2023
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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nods

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Reply 2 on: Aug 7, 2023
Excellent

FergA

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

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