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===Choice of interest rate=== The interest rate used is the [[risk-free interest rate]] if there are no risks involved in the project. The rate of return from the project must equal or exceed this rate of return or it would be better to invest the capital in these risk free assets. If there are risks involved in an investment this can be reflected through the use of a [[risk premium]]. The risk premium required can be found by comparing the project with the rate of return required from other projects with similar risks. Thus it is possible for investors to take account of any uncertainty involved in various investments.
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