Explain how the risk of the project is evaluated and incorporated in the capital budgeting decision.

Compare and contrast the three types of risk in capital budgeting projects.

With which one should managers be most concerned and why?

Provide an example of a capital budgeting project for an organization with which you are familiar.

Explain in detail how you would conduct a scenario analysis and a sensitivity analysis for this project.

Explain what information each type of analysis provides that the other does not.

Explain the impact of risk on discount rate used to find NPV and as a benchmark for IRR.