In a Decision Tree, the NPV to Make the Yes/no

question 21

Multiple Choice

In a decision tree, the NPV to make the yes/no decision is dependent on:

• A) only the cash flows from successful path.
• B) on the path where the probabilities add up to one.
• C) all cash flows and probabilities.
• D) only the cash flows and probabilities of the successful path.

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Definitions:

Consume

The act of using up a product or service, often involving the purchase of goods for personal use.

Buying Center

A group of individuals within an organization who are involved in making a purchasing decision.

Deciders

Individuals or groups within an organization responsible for making final purchasing or policy decisions.

Formal Authority

The power granted to an individual or organization by virtue of their position or role, enabling them to enforce rules or make decisions.