what is mean by risk-return trade-off in capital budgeting?
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Financial management
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The principle that potential return rises with an increase in risk.
Low levels of uncertainty (low-risk) usally have low potential returns & vice versa
According to the risk-return tradeoff, invested money can render higher profits only if it is subject to the possibility of being lost(risk). (In simple terms risky capital proposals yeild more return).
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