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Scenarios
In finance and planning, scenarios represent different potential future states or outcomes, used to evaluate the impact of varying conditions on projects or investments.
Certainty Equivalent Approach
A method used in capital budgeting and investment theory that adjusts future cash flows to account for risk, making them equivalent in value to cash flows received with certainty.
Risk-Free Rate
The return on an investment with no risk of financial loss, typically represented by government bonds.
Branch Decision Tree Analysis
A systematic, graphical approach to evaluating all possible alternatives in decision-making, representing outcomes, resources, costs, and utility.
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