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The Advantage of Using Simulation in the Capital Budgeting Process

Question 37

Multiple Choice

The advantage of using simulation in the capital budgeting process is


A) that it generates a continuum of risk-return tradeoffs rather than a single-point estimate.
B) the availability of a continuum of risk-return tradeoffs which may be used as the basis for decision making.
C) ease of calculation.
D) dependability of predetermined probability distributions.

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