Question: Explain the basic structure and logic of decision-tree analysis for capital budgeting and valuation. In your discussion, comment on how options to expand the project,

Explain the basic structure and logic of decision-tree analysis for capital budgeting and valuation. In your discussion, comment on how options to expand the project, as well as options to abandon the project, are taken into account. Also, comment on whether a fixed or varying discount rate should be used in the analysis. Finally, explain how sensitivity and scenario analysis would strengthen this approach.

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