A simplified guide to capital investment risk analysis
Michael D. Everett
(Associate professor of management and marketing at East Tennessee State University in Johnson City, TN.)
89
Abstract
What's the best way to evaluate and select projects with uncertain returns? Do you simply rely on the best estimate of profits or expected values to guide you to the projects with the highest returns? If so, what do you do when you're faced with a choice between project A, which has an expected value of $100,000 but which also has a 25 percent risk of bankrupting the firm, and project B, which has a negligible .003 percent risk but only offers a return of $50,000?
Citation
Everett, M.D. (1986), "A simplified guide to capital investment risk analysis", Planning Review, Vol. 14 No. 4, pp. 32-36. https://doi.org/10.1108/eb054154
Publisher
:MCB UP Ltd
Copyright © 1986, MCB UP Limited