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Pavlos Tsoump
on Dec 01, 2024

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The certainty equivalent approach uses computer simulation methods which make for a more accurate prediction of cash flows.

Certainty Equivalent Approach

A method used in capital budgeting and investment finance that adjusts the future cash flows of risky investments to reflect their riskiness as compared to a certain cash flow.

Computer Simulation

Computer Simulation is a digital simulation of a real-world process or system over time, using computer software to study the behavior under various conditions.

  • Comprehend and elucidate the certainty equivalent method and its utilization in the context of capital budgeting.
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IA
Ibrahim AbdulrahimDec 04, 2024
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