An Automatic Bias Against High-Risk Projects Is Created By

Multiple Choice

An automatic bias against high-risk projects is created by:

A) using the IRR technique, which produces an intrinsic return which is risk adjusted.
B) using a higher rate than the cost of capital when applying NPV and IRR to risky projects.
C) adjust NPVs and IRRs up when evaluating risky projects.
D) make an intuitive judgment about risk after the analysis is done.