Answer:
e) Increase the required rate of return used to evaluate the project to reflect the higher risk of the project
Explanation:
As per the basic concept of investment, "higher the risk, higher the return".
Thus, an investor assumes a higher risk only in the scenario wherein the expected return would be commensurate with such risk. Investor would only invest in a risky asset when the return derived can compensate him for the excess risk assumed.
Required rate of return is an investors expectation of return from a project also referred to as the cost of capital.
So for the purpose of evaluating the project, the investor should use a higher required rate of return to signify higher risk which would reveal the true viability of the project.
No, it will not be affected as contingent liabilities are yet not recognized.
Assets are owned by the company and liabilities are borne by the company. Both are listed on the company's balance sheet, which is a financial statement that shows the financial condition of the company. Assets fewer liabilities equal the owner's equity or net worth.
Debt mainly has three classifications. These are short-term liabilities, long-term liabilities, and contingent liabilities. Short-term and long-term liabilities are the most common in business. As with businesses, the net worth of an individual or household is determined by weighing assets and liabilities for most households, liabilities.
Learn more about liabilities at
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Answer:
0
Explanation:
Cross price elasticity of demand measures the responsiveness of quantity demanded of good B to changes in price of good A.
The increase in price of product A has no effect on the quantity demanded of product B. Therefore, the cross price elasticitiy is zero.
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