Question

When the risks of the individual components of a project’s cash flows are different, an acceptable procedure to evaluate these cash flows is to:
A. Discount each cash flow using a discount rate that reflects the degree of risk.
B. Utilize the accounting rate of return.
C. Compute the net present value of each cash flow using the firm’s cost of capital.
D. Compare the internal rate of return from each cash flow to its risk.

Answer 1

The answer would be the first one for sure