I$\text{'}$s is preparing to start a new project in an industry that dffers significantly from its curent operations. jis has why might fess assign a higher beta to the project than the beta of the pure play?

The new peoject may be more responave to the econonyy than the pure play and thus represert a higher risk.

The propect may incur fiftation costs so a higher beta is warranted to offiet the addional cost.

Thirieverues of the project may be expected to be less cyclical than those of the pure play.

The firmimay use less delit in its eperations than does the pure play.

The gereraty accepred pratice would be to asigig a beta to the propect that is basied on the average of the firms beta and the pure play's beta.