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As financial managers there are tools, such as scenario & sensitivity analysis, we can use to minimize certain risks. Let us see if we can incorporate risk into the capital budgeting process. You are a construction project manager looking at two projects : (1) An apartment building, three stories high, 30 units with 2 bed rooms; (2) Replace an old concrete bridge on a two lane road. Name a few things regarding each type of project that you might include in your risk analysis. How would you quantify these risks?

Financial Management, Finance

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