Intermediate Financial Management
Intermediate Financial Management
14th Edition
ISBN: 9780357516782
Author: Brigham, Eugene F., Daves, Phillip R.
Publisher: Cengage Learning
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Chapter 13, Problem 6Q
Summary Introduction

To discuss: Differences between scenario analysis and simulation analysis in the way they treat as good and bad outcomes and implications of these techniques while evaluating the project riskiness.

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How do simulation analysis and scenario analysis differ in the way theytreat very bad and very good outcomes? What does this imply about usingeach technique to evaluate project riskiness?
How should firms evaluate projects with different risks?
What is a scenario analysis? What is it designed to show, and how does it differ froma sensitivity analysis?
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