The decision to employ some risk analysis technique to evaluate an investment project depends on the project’s size and the additional cost of applying such a technique as compared with the perceived benefits. For small projects, only the simpler risk adjustment techniques should be used; for major projects that have above- or below-normal risk, it is worthwhile to analyze the project’s risk as precisely as possible. Failure to fully analyze the risk of a large project could result in bad investment decisions and even substantial losses. P-698