Why May an Analysis That Makes Even a Rough Estimate

question 45

Essay

Why may an analysis that makes even a rough estimate of the probability distribution of project NPV or IRR be infinitely more valuable to management than a point estimate? Why are scenario and especially decision tree analysis particularly valuable with regard to this issue?

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Definitions:

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Assigned to a position or role, often officially or by authority.

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Substantial Business

A business operation of significant size or importance, often involving considerable amounts of capital, employees, or market presence.

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