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1. Outline. 1.Decision Trees2. Sensitivity Analysis, Scenario Analysis 3. Break-Even Analysis4. Monte Carlo Simulation. 2. Decision Trees. We often make decisions in a sequence. For example, when you makes a capital budgeting decision, you may first want to do test marketing. Then, depending on the result of test marketing, you either go ahead with full scale investment. In this case, you are making a sequence of two decisions First, you make a decision regarding whether you should do the 9444

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Lecture note 5 Chapter 8


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