Probability technique For Risk And Uncertainty In Capital Budgeting:
Probability technique refers to the each event of future happenings are assigned with relative frequency probability. Probability means the likelihood of future event. The cash inflows of the future years further discounted with the probability. The higher present value may be accepted.
If the net present value of project A is more than that of project B after taking into consideration the probabilities of cash inflows, project A is more profitable one.
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Probability technique refers to the each event of future happenings are assigned with relative frequency probability. Probability means the likelihood of future event. The cash inflows of the future years further discounted with the probability. The higher present value may be accepted.
If the net present value of project A is more than that of project B after taking into consideration the probabilities of cash inflows, project A is more profitable one.
Probability technique For Risk And Uncertainty In Capital Budgeting
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