What are the shortcomings of the approach

Reference no: EM131337454

1. How does the basic net present value model of capital budgeting deal with the problem of project risk? What are the shortcomings of this approach?

2. How would you define risk as it is used in a capital budgeting analysis context?

3. Recalling the discussion in Chapter 6, when is the standard deviation of a project's cash flows an appropriate measure of project risk? When is the coefficient of variation an appropriate measure?

Reference no: EM131337454

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