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    • Question

      A project has NPV of ₹5 lakh and standard deviation of

      cash flows is high. What does it indicate?
      A High return with low risk Correct Answer Incorrect Answer
      B Stable cash flows Correct Answer Incorrect Answer
      C High risk despite positive NPV Correct Answer Incorrect Answer
      D Negative IRR Correct Answer Incorrect Answer

      Solution

      NPV measures return, while standard deviation indicates risk. High deviation = volatile/uncertain cash flows.

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