Asked by mallika persaud on Jun 08, 2024
Verified
Which of the following is not a method for incorporating risk analysis into capital budgeting?
A) Positive/Negative analysis
B) Monte Carlo simulations
C) Scenario analysis
D) Sensitivity analysis
E) Decision tree models
Positive/Negative Analysis
An evaluative process that assesses the positive and negative outcomes or impacts of a decision or situation.
Risk Analysis
The process of identifying, assessing, and prioritizing risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability or impact of unfortunate events.
Capital Budgeting
The process by which businesses evaluate and prioritize investments in projects and acquisitions to maximize their long-term value.
- Distinguish multiple approaches for embedding risk within capital budgeting decisions, including the application of Monte Carlo simulation.
Verified Answer
Learning Objectives
- Distinguish multiple approaches for embedding risk within capital budgeting decisions, including the application of Monte Carlo simulation.
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