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You have been asked to conduct cost benefit analysis of a government program. There are uncertainties associated with the values of the variables used in
You have been asked to conduct cost benefit analysis of a government program. There are uncertainties associated with the values of the variables used in the cost benefit analysis. Your supervisor has asked you to use either a Monte Carlo simulation or a variable-to-variable approach to incorporate the uncertainties into the analysis. Briefly describe the two analytical approaches.What are the differences between the two approaches? Which approach would you prefer to use in dealing with the uncertainties? Give reason(s) why?
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