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    Factors behind project risks and present value

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    What determines project risk and preset value?
    Please answer the questions.
    Explain why you think it is significant. Why this is a practicial problem in finance? What would you recommend to be a creative way to attack this problem?

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    Solution Preview

    The problem wants you to find out the factors behind project risks and present value. Then the reasons for this risk being important, its financial significance and an innovative way of dealing with this problem.

    There are several assumptions that this problem makes, it makes a presumption that there is a fixed set of factors which determines risks, however this is not the reality, for instance a person may factor in the risk of foreign exchange rate fluctuations if the purchases are to be made abroad, however it would be very difficult for him to forecast if there ...

    Solution Summary

    This solution discusses factors behind project risks and present values.