Multiple Choice Questions on Dev has two projects A and B in hand The same amount of risk is involved in both the projects If the........... for Commerce 12th Preparation

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Multiple Choice Questions

Dev has two projects A and B in hand The same amount of risk is involved in both the projects If the...........

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    Dev has two projects A and B in hand. The same amount of risk is involved in both the projects. If the rate of return of project A and B is 20% and 15% respectively, then under normal circumstance, which of the two projects is likely to be selected?

    Project A

    Correct Answer

    Project B

    Incorrect Answer

    Both project A and project B

    Incorrect Answer

    None of the above

    Incorrect Answer
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    Explanation:

    - Option 1: Project A

    - Project A offers a 20% rate of return.

    - Given the same risk level as Project B, it's more appealing due to the higher return.

    - Correct Answer: Choosing the project with the higher return is a logical choice.

    - Option 2: Project B

    - Provides a 15% rate of return.

    - Less attractive than Project A given the same risk level.

    - Option 3: Both project A and B

    - Investing in both could spread risk, but with equal risk and a small return difference, not optimal.

    - Option 4: None of the above

    - This wouldn’t apply since Project A clearly stands out.

    By: santosh
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