Finance

decision making under risk

Decision Making Under Risk and Uncertainty

Decision making under risk and uncertainty is a fact of life.  There are many ways of handling unknowns when making a decision.  We will try to enumerate the most common methods used to get information prior to decision making under risk and uncertainty.  We’ll also look at decision rules used to make the final choice.  For …

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Evaluating an R&D Project with a Decision Tree

Decision trees are useful for projects that proceed in stages where investment decisions may change over time.  In this application brief, we will use decision tree analysis to evaluate a research and development project where we are uncertain if a commercial product can be produced as a result of the research portion of the project. …

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