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Risk in Capital projects: What analyses would you request?

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How can you adjust for risk in capital projects?

If you were the CEO deciding between two significant capital projects, what analyses would you request?

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The expert examines the risk in capital projects for analysis request.

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How can you adjust for risk in capital projects?

Every capital project entails several risks associated with it. Capital projects are evaluated using the firm's cost of capital. One of the most common measures of adjusting the risk involved in a capital project is to adjust the cost of capital used to evaluate the project. If the risk of a project is higher, the cost of capital is adjusted upwards to reflect higher rate of return required due to ...

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