When evaluating risk, why is it better to simulate the distribution of possible NPVs rather than taking

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When evaluating risk, why is it better to simulate the distribution of possible NPVs rather than taking the expected value of each risky factor and calculating the expected NPV based on the expected values?

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Entrepreneurial Finance Venture Capital Deal Structure And Valuation

ISBN: 9781503603219

2nd Edition

Authors: Janet Kiholm Smith, Richard L. Smith

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Question Posted: Apr 26, 2024 06:02 AM

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When evaluating risk, why is it better to simulate the distribution of possible NPVs rather than taking

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Simulating the distribution of possible Net Present Values NPVs rather than relying solely on expect...View the full answer

Entrepreneurial Finance Venture Capital Deal Structure And Valuation

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