The Advantage of Using Simulation in the Capital Budgeting Process

question 41

Multiple Choice

The advantage of using simulation in the capital budgeting process is

• A) that it generates a continuum of risk-return tradeoffs rather than a single-point estimate.
• B) the availability of a continuum of risk-return tradeoffs which may be used as the basis for decision making.
• C) ease of calculation.
• D) dependability of predetermined probability distributions.

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Definitions:

Idealized Influence

A leadership approach where leaders become role models by acting in ways that inspire and earn the trust and respect of followers.

Transactional Leaders

Leaders who focus on supervision, organization, and performance; they are concerned with transactions between themselves and their followers.

Self-Interest

The motivation driven by one's own personal gain or benefit.

Empower Subordinates

Giving authority or power to lower-level employees, enabling them to take initiative and make decisions.