Which of the Following Is a Reason Why Risk Analysis

question 56

Multiple Choice

Which of the following is a reason why risk analysis is an important part of capital budgeting?

• A) The people who propose projects have no vested interest in whether or not they are accepted.
• B) Marketing managers are rarely excessively optimistic.
• C) Project cash flows can be highly uncertain.
• D) Financial analysts are rarely excessively pessimistic.

---

Definitions:

Gross Domestic Product

The overall economic value of all produced goods and services within the borders of a country, measured over a designated time period.

Output Value

The total value of all goods and services produced by an individual, company, or country.

Increase

A rise in the amount, size, or number of something.

Gini Coefficient

A measure of income inequality within a population, ranging from 0 for perfect equality to 1 for complete inequality.