The Advantage of Using Simulation in the Capital Budgeting Process

question 69

Multiple Choice

The advantage of using simulation in the capital budgeting process is

• A) ease of calculation.
• B) the availability of a continuum of risk-return trade-offs which may be used as the basis for decision-making.
• C) dependability of predetermined probability distributions.
• D) that it generates a continuum of risk-return trade-offs rather than a single-point estimate.