Which of the Following Are Reasons to Analyse the Risk

question 107

Multiple Choice

Which of the following are reasons to analyse the risk of capital projects?

• A)The people who propose projects have a vested interest in getting them accepted.
• B)Cash flows can rarely be estimated with certainty.
• C)Many of the variables in capital budgeting analysis are highly sensitive to changes in economic conditions.
• D)All of the above.

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Definitions:

Signal Detection Theory

An approach to evaluate the capability of identifying information-carrying patterns from random ones that interfere with the information.

Absolute Threshold

The minimum intensity of a stimulus required to be perceived by the senses.

Top-Down Processing

A cognitive process that emphasizes the importance of concepts, expectations, and memory in interpreting sensory information.

Difference Thresholds

The minimum difference in intensity between two stimuli required for detection 50% of the time, also known as the just noticeable difference (JND).