To Set Up a Decision Tree,you Should

question 77

Multiple Choice

To set up a decision tree,you should

• A)assign the most optimistic values to a success and the most pessimistic values to a failure.
• B)determine the cash flows that are most apt to occur given a set of circumstances.
• C)assign a constant discount rate to all decisions within the tree.
• D)ignore a project's initial cost.
• E)use equal probabilities for success and failure.

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Definitions:

Reaction

A process in which substances, the reactants, undergo a transformation to produce new substances, the products.

Cyclohexanone

A cyclic ketone with the formula C6H10O, characterized by a six-member ring structure with a ketone group, used as a solvent and in the production of chemicals.

Coefficient of Correlation

A statistical measure that calculates the strength of the relationship between the relative movements of two variables.

Covariance

A measure that indicates the extent to which two variables change together, showing if increases in one variable correspond to increases in another.