Question

The problem with using ________ when trying to adjust for projects that are more risky or less risky than a firms average project is that these adjustments are extremely subjective and difficult to justify

Answer 1

A risk adjusted cost of capital

Step-by-step explanation:

In the case when there is any adjustment made with respect to the projects in terms of more risk or less risk as compared with the average project of a form. Also these type of adjustment would be subjective and difficult to justify so here the problem used the cost of capital i.e. risk adjusted as it can be seen that the more risk is there the higher return is there

Therefore the above is the answer

hence, the same is to be considered