Two Approaches for Dealing with Project Risk to Capture the Variability

question 13

Multiple Choice

Two approaches for dealing with project risk to capture the variability of cash inflows and NPVs are

• A) sensitivity analysis and simulation.
• B) scenario analysis and simulation.
• C) none of the above.
• D) sensitivity analysis and scenario analysis.

---

Definitions:

Mood

A temporary state of mind or feeling that can vary from happiness to sadness, which affects a person's emotional state but is less intense than emotions.

Cognitive Arousal Theory

A theory suggesting that arousal in the cognitive system can affect emotions and motivation.

Emotion

A complex psychological state involving an experiential, behavioral, and physiological response to a situation or stimulus.

Afraid

A feeling of fear or anxiety about a possible or imminent event or situation.