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Evaluates risk analysis in capital budgeting, suggesting improved decision-making accuracy.
A capital budgeting procedure which includes the element of risk represents a more appropriate approach to decision making than the "what if" procedure commonly employed. This paper describes the application of risk analysis, via Monte Carlo simulation, to the capital budgeting problem. It illustrates the application by means of Framework, a relatively inexpensive software package designed for microcomputers.
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Golden et al. (1987) studied this question.
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