Three Common Methods to Incorporate an Adjustment for Risk into the Capital

question 27

True/False

Three common methods to incorporate an adjustment for risk into the capital budgeting analysis are the use of risk-adjusted discount rates, sensitivity analysis, and simulation.

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Definitions:

Promissory Estoppel

A legal principle preventing a party from withdrawing a promise made to another party if the latter has relied on that promise to their detriment.

Promisee

The person to whom a promise is made in a contractual agreement, and who stands to benefit from its fulfillment.

Promise

A promise or guarantee that an individual will take a specific action or ensure a certain event occurs.

Legally Sufficient

Describes evidence or information that meets the established legal standards to support a claim or decision in court.