Which of the following statements about project standing alone risk is true?

A) It ignores the fact that much of the risk of a project will be diversified away as the project is
combined with the firm's other projects.
B) It provides the best measure of project risk for a large, widely-held company.
C) It takes into consideration the effects of diversification of the firm's shareholders.
D) It ignores the cash flows that are associated with a project that occur beyond the payback
period.

A