Which of the Following Techniques Gives an Estimate of Capital

question 56

Multiple Choice

Which of the following techniques gives an estimate of capital budgeting project risk in terms of the standard deviation of a project's NPV or IRR?

• A)Computer simulation
• B)Sensitivity/scenario analysis
• C)Decision tree analysis
• D)Both a and c
• E)All of the above

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Definitions:

Seismic Activity

The frequency, type, and size of earthquakes experienced over a period of time in a particular area, often measured to assess and monitor earth movements.

Sulfur Dioxide

A toxic gas with the formula SO2, produced by volcanic eruptions and industrial processes, and a precursor to acid rain.

Tilting

The process or phenomenon where the earth's surface, geological layers, or structures become inclined from their original level or position, often due to tectonic activities.

Pyroclastic Eruptions

Volcanic eruptions characterized by the explosive expulsion of ash, lava bombs, and gases at high velocity.