What are the techniques used in measuring the risk present in capital budgeting decision? (500 words)

 Formulate an overview of the capital budgeting decisions and explain a few dangers such as the project risk, timing risk, macroeconomic risk and so on.

 Sensitivity analysis  here you discover how it provides an insight about the variations of individual variables.

 Scenario analysis  elaborating on its ability to determine consequences stemming from concurrent variables falling on project outcomes.

 Simulation  Describe how it is done to depict random events with a probability distribution.

 You may also discuss them like: decision tree, payback risk, and Monte Carlo simulation.

 Show the technique's diversity by highlighting its practical use.

 Outline the two decisionmaking options and their parameters like complexity, option for informed decisions.

 Summarize by mentioning how to choose unless less complex situations or those without multiple criteria might question be more thorough for other types of instances with multiple criteria may result in more complexity.