What question did this study set out to answer?

The aim is to explore how uncertainty in future cash flows can be formally recognized in capital budgeting using probability theory.

Uncertainty and Capital Budgeting.

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This article demonstrates a probability-based approach to capital budgeting, suggesting implications for investment decision-making.

The aim is to explore how uncertainty in future cash flows can be formally recognized in capital budgeting using probability theory.
Introduced the probability approach to capital budgeting based on net present value analysis.
Highlighted the applicability of the rate-of-return approach using similar principles from probability theory.
Discussed the potential of adapting a probability beliefs approach for portfolio selection to capital budgeting.
Considered the use of historical data as an alternative in certain scenarios.
Established that recognizing uncertainty enhances investment analysis.
Demonstrated the equivalence of the probability approach to both net present value and rate-of-return methods.
Identified the importance of probability theory concepts for effective capital budgeting.

Neil R. Paine (1964) studied this question.

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