Suppose a firm is evaluating a new project. If the new project has a higher risk than the firm's average risk, which of the following would be reasonable for management to do in evaluating the project?

a$.$ Reject the project, since its acceptance would increase the firm's risk.

b$.$ Ignore the risk differential if the project would amount to only a small fraction of the firm's total assets.

c$.$ Adjust the discount rate used to evaluate the project to reflect its higher$-$than$-$average risk.

d$.$ Increase the estimated NPV of the project to reflect its greater risk.