Simulation Models Allow the Planner to

question 58

Multiple Choice

Simulation models allow the planner to

• A) reduce the standard deviations of projects.
• B) plan ahead for all possible changes in each variable.
• C) deal with the uncertainty of investment risk.
• D) test possible changes in each variable and deal with the uncertainty in forecasting outcomes.

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Definitions:

Deposit Today

An amount of money placed into a financial account or investment at the present time.

Cash

Liquid assets that can be used immediately for transactions, including currency and bank balances.

Compound Interest

Interest computed not only on the original amount invested or loaned but also on the interest that has been added to this principal over past periods.

Simple Interest

Interest computed solely on the initial sum, without accumulation through compounding.