Sometimes, Comparing Project NPVs Properly Can Be Surprisingly Tricky

question 13

Essay

Sometimes, comparing project NPVs properly can be surprisingly tricky. What are three important, but often challenging decisions which managers commonly face?

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Definitions:

Availability Heuristic

The tendency to assume that information that comes easily to mind (or is readily available) is more frequent or common.

Locus Of Causality

The position or place within an individual that determines where the cause of behavior is perceived to originate, whether internally (within oneself) or externally (outside factors).

Internal

Pertaining to or situated within something; intrinsic.

External

Originating from outside, not inherent or internal to an entity or individual.