Equipment cost			$70,000
Shipping charge			$7,056
Installation charge			$26,000
Economic Life			4
Salvage Value			$0
Tax Rate			55%
Cost of Capital			6%
Units Sold			1500
Sales Price Per Unit			$100
Incremental Cost Per Unit			$65
Inventory/sales			15%
Inflation rate			5%

i. (1.) What are the three types of risk that are relevant in capital budgeting?

(2.) How is each of these risk types measured, and how do they relate to one another?

(3.) How is each type of risk used in the capital budgeting process? l. Are there problems with scenario analysis? Define simulation analysis, and discuss its principal advantages and disadvantages. (3.) Are there any subjective risk factors that should be considered before the final decision is made? Need help with answering this. Please use a excel workshet. Thank you