Final answer:
A firm can be viewed as a portfolio of individual projects, each with their own risks, cost of capital, and returns.
Step-by-step explanation:
The answer to the question is A) a portfolio of individual projects, each with their own risks, cost of capital, and returns.
A firm can be viewed as a collection of individual projects, each with its own characteristics and outcomes. Each project may have different risks, the cost of capital associated with it, and potential returns.
This perspective allows us to analyze and evaluate the performance of each project within the firm and make informed investment decisions.
For example, a manufacturing firm may have multiple projects such as launching a new product, expanding operations, or improving supply chain efficiency.
Each project will have different risks, required capital investment, and expected returns. By viewing the firm as a portfolio of projects, we can assess the overall risk and return profile of the firm and make decisions accordingly.