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Certainty equivalent method For Risk And Uncertainty In Capital Budgeting

Certainty equivalent method For Risk And Uncertainty In Capital Budgeting:

finance
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It is also another simplest method for calculating risk in capital budgeting. It reduces expected cash inflows by certain amounts it can be employed by multiplying the expected cash inflows by certainly equivalent co-efficient in order the uncertain cash inflow to certain cash inflows.

If the net present value of project A is more than that of project B, Project A should be preferred.

Certainty equivalent method For Risk And Uncertainty In Capital Budgeting Certainty equivalent method For Risk And Uncertainty In Capital Budgeting Reviewed by Blog Editor on Tuesday, May 23, 2017 Rating: 5

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