In the Context of Capital Budgeting, Risk Generally Refers to

question 97

Multiple Choice

In the context of capital budgeting, risk generally refers to

• A) the degree of variability of the cash inflows.
• B) the degree of variability of the initial investment.
• C) the chance that the net present value will be greater than zero.
• D) the chance that the internal rate of return will exceed the cost of capital.

---

Definitions:

Mean Height

The average height of a group of individuals.

Confidence Interval

A set of values, from sampled data, believed to contain the value of an obscure population parameter.

Sample Mean

The arithmetic average of a set of values sampled from a population, used as an estimate of the population mean.

Confidence Interval

A confidence interval provides a range of values, estimated from sample data, that is likely to contain the value of an unknown population parameter, along with a specified level of confidence.