When Using Simulation to Analyze a Large Capital Project, the Decision

question 66

Multiple Choice

When using simulation to analyze a large capital project, the decision rule is

• A) There is no clear cut decision rule, but the probabilities will produce a more informed decision.
• B) Accept the project if the probability of a positive NPV is greater than 50%.
• C) Reject the project if the probability of a negative NPV is greater than 5%
• D) Reject the project if the probability of a negative NPV is greater than 16%

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