The CFO of Bogey Golf has been given the following information about two mutually exclusive investments: The
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The CFO of Bogey Golf has been given the following information about two mutually exclusive investments:
The CFO normally uses a risk-adjusted required rate of return to evaluate such investments. The firm?s average required rate of return, which is 15 percent, is adjusted by 5 percent for high-risk projects, and it is adjusted by 3 percent for low-risk projects. Which project(s) should Bogey purchase?
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Project Risk 14.0% 14.0% Average High 19.0
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