1.There are investments that are less risky than others or less risk associated

with a particular project. You have to always account for risk. Therefore, when a company undertakes a capital budgeting project, risk must be assessed. 

What factors increase the riskiness of a project? 

How do financial managers account for risk? 

2. One disadvantage of the IRR is that it can produce multiple results when faced with nonconventional cash flow. 

Which tool(s) should we use when faced with nonconventional cash flow?

Also, NPV is conceptually the best tool for capital budgeting. Why do you think firms continue to practice the others?

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