The technique used to consider a range of possibilities in capital budgeting decisions is called:

Question

Quizplus · Accepted Answer

Sensitivity analysis is the technique used in capital budgeting to consider a range of possibilities and potential changes in variables such as costs, revenues, and discount rates. It helps to identify the level of risk involved in a capital budgeting decision and determine the impact of various scenarios on the outcome. The other options, discounted cash flow, net present value, and ranking, are methods used within sensitivity analysis. Therefore, C is the best choice.

The Technique Used to Consider a Range of Possibilities in Capital