To set up a decision tree, you should Multiple Choice

assign the most optimistic values to a success and the most pessimistic values to a failure.

determine the cash flows that are most apt to occur given a set of circumstances.

assign a constant discount rate to all decisions within the tree. ignore a project's initial cost.

use equal probabilities for success and failure.

Question

Sheppard

Business

12 May, 13:23

To set up a decision tree, you should Multiple Choice

assign the most optimistic values to a success and the most pessimistic values to a failure.

determine the cash flows that are most apt to occur given a set of circumstances.

assign a constant discount rate to all decisions within the tree. ignore a project's initial cost.

use equal probabilities for success and failure.

+4

Answers (1)

Know the Answer?

Felipe Ward · Answer 1

Answer: Determine the cash flows that are most apt to occur given a set of circumstances.

Explanation:

To make a decision on a project to be implemented one must engage in the most apt of financial analysis because predicting the future is no easy task but one must try to get the most accurate of figures when trying to make a decision to enable a smooth implementation of the project.

One should also remember that there are different scenarios that may occur with a project and it is imperative that all those scenarios are researched and assigned the most apt of figures to ensure for instance, that should that scenario happen, plans can be made to fully utilize whatever opportunities it presents.