The appropriate discount rate used in decision tree methodology

A) should be risk-adjusted,and risk may vary by period and decision node.
B) should be risk-adjusted,and risk may not vary by period and decision node.
C) should not be risk-adjusted,and risk may vary by period and decision node.
D) should not be risk-adjusted,and risk may not vary by period and decision node.

Discount Rate

The interest rate used in discounted cash flow analysis to determine the present value of future cash flows.

Decision Tree Methodology

A problem-solving tool that uses a tree-like model of decisions and their possible consequences, including chance event outcomes, resource costs, and utility.

Risk-Adjusted

Describes a method of evaluating investments, strategies, or projects taking into consideration the uncertainty and the potential for loss or variance from expected results.