Question
Unfortunately (or fortunately?) we do not have a magic ball and cannot predict the future, this means that most likely our estimates for the previous
Unfortunately (or fortunately?) we do not have a magic ball and cannot predict the future, this means that most likely our estimates for the previous question are not correct. That is, every project carries risks. To understand the risks of the project, we can conduct several analyses. Your colleague gives you an in-depth analysis on the project that considers several variables, their distributions and their correlations. The output is a estimated NPV distribution. What type of analysis has your colleague conducted? What does the output tell us about the risk of the project? Explain how this type of analysis is different to one other method of analysing a project.
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