General Forge and Foundry Co. is considering investing in a project in which the risk is greater than the firms current risk based on any method for assessing risk. Which of the following should management do when evaluating this project?
A. To take the higher risk level into account, they will need to increase the IRR of the project
B. To take the higher risk level into account, they will need to use a discount rate that is greater than the cost of capital to evaluate the project
C. They should always reject the project, because it will increase the firm's risk level
D. To take the higher risk level into account they will need to increase the NPV of the project