- How is sensitivity analysis used in project selection?
- Contrast risk with uncertainty. Describe the window-of-opportunity approach.
- How does a risk analysis operate? How does a manager interpret the results?
- Can risk analysis be used for non-project business decision making? Explain how.
- Contrast validity with reliability. What aspects, if any, are the same?
- Contrast subjective and objective measures. Give examples of the proper use of each type of measure when evaluating competing projects.
- Can a measure be reliable, yet invalid? Explain.
- Interpret the columns of data in Table 2-4. Does the $10,968 value mean that the project is expected to return only this amount of discounted money?
- How would you find the probability in Figure 2-9 of an NPV of over $20,000?
- Reconsider Table 2-3 to explain why the simulated outcome in Table 2-4 is only about half as much as the value originally obtained in Table 2-2. Does the spread of the data in Table 2-3 appear realistic?
- What important comparisons does the aggregate project plan in Figure 2-10 allow?
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