A firm is considering a new project whose risk is lower than the risk of the firms average project, based on all methods for assessing risk. In evaluating this project, it would be reasonable for management to do which of the following?

Question 2 options:

increase the estimated IRR of the project to reflect its lower risk

reject the project because low-risk projects are not profitable

lower the estimated cost of capital of the project to reflect its lower risk

ignore the lower risk when evaluating the project