The Advantage of Using Simulation in the Capital Budgeting Process

question 43

Multiple Choice

The advantage of using simulation in the capital budgeting process is the ________.

• A) ease of calculation over scenario analysis
• B) continuum of risk-return trade-offs for decision making
• C) single point estimate that helps the decision maker to choose the most accurate alternative
• D) use of several possible outcomes to asses risk

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Definitions:

Process Cost Accounting

An accounting method used to track and allocate costs of production by process or department.