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p_eval4_l21_ris - 1.011 Project Evaluation Dealing with...

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1.011 Project Evaluation Dealing with Risks & Uncertainty Carl D. Martland 1. Definitions 2. Techniques 3. Examples
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"Make Uncertainty Explicit" (Principle 6, Sullivan et al, Engineering Economy, p. 7) Understand the uncertainties and the risks Seek protection against the most serious risk Use discount rates that are suitable for the risks evident for a particular project Higher discount rates for riskier projects
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