Provide an explanation of how adjusting the discount rate in the basic NPV model of capital budgeting deals with the problem of project risk

  • Exhibit your Excel function entries and results, or your calculations using present value tables, for each of your NPV and IRR calculations (A-D) and provide an explanation  of all calculations
  • Explain your recommendation regarding whether the project should be accepted and a justification of your response.
  • Provide an explanation of how adjusting the discount rate in the basic NPV model of capital budgeting deals with the problem of project risk.
  • Examine the potential motivation for unethical behavior by executives that may take place in the capital budgeting process and explain how biasing cash-flow estimates can work to the advantage of the executive who intentionally inserts such bias.