This is a great question! Probability analysis is crucial for assessing project risk. I think all the options are pretty solid, though D might be a bit of a stretch depending on the sample size.
B) The net present value (NPV) of the project, if all high, low or medium estimates occurred, can be calculated along with the combined probabilities of their occurrence.
A) The company can determine a range of possible outcomes for each of the cash flows in the project, for example, a high, low and medium estimate of each cash flow could be determined.
Haha, you know what they say, 'the only thing certain in life is uncertainty!' This question really drives that point home. I'd go with A, B, and C for a well-rounded analysis.
Hmm, I'm not sure about option D. Calculating the probability distribution from a small sample size seems a bit risky to me. I'd want a larger sample to feel confident about the results.
Filiberto
2 months agoLavonna
2 months agoChandra
2 months agoRodrigo
2 months agoAltha
3 months agoAja
2 months agoNana
2 months agoGearldine
2 months agoSoledad
3 months agoLaquita
2 months agoLeontine
2 months agoBarb
2 months agoBernadine
2 months agoAbraham
3 months agoLeonida
3 months agoFranchesca
3 months ago