Simulation Models Allow the Planner To

question 62

Multiple Choice

Simulation models allow the planner to:

• A) reduce the standard deviations of projects.
• B) test possible changes in each variable.
• C) deal with the uncertainty in forecasting outcomes.
• D) b and c.

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Definitions:

Debt-Equity Ratio

A financial ratio indicating the relative proportion of shareholders' equity and debt used to finance a company's assets.

Relevant Discount Rate

The interest rate used to discount future cash flows to their present value to account for the risk and time value of money in decision making.

Cost of Borrowing

The total charges, including interest and any other fees, that a borrower incurs when taking out a loan.

After-Tax Cost

The expense of an expenditure or investment after accounting for the effects of taxes.