CHAPTER 9RISK ANALYSIS, REAL OPTIONS, AND CAPITAL BUDGETINGAnswers to Concepts Review and Critical Thinking Questions1.Forecasting risk is the risk that a poor decision is made because of errors in projected cash flows. The danger is greatest with a new product because the cash flows are probably harder to predict.2.With a sensitivity analysis, one variable is examined over a broad range of values. With a scenario analysis, all variables are examined for a limited range of valu
