To set up a decision tree,you should

Question

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To set up a decision tree, one should determine the cash flows that are most likely to occur given a specific set of circumstances. Assigning optimistic or pessimistic values to success/failure outcomes or ignoring the project's initial cost would not accurately reflect the potential outcomes and risks involved. Using equal probabilities for success and failure would also not accurately depict real-world probabilities for certain events. The discount rate may vary for different decisions within the tree based on factors such as risk, time, and opportunity cost.

To Set Up a Decision Tree,you Should