Question

please check answers and complete the last part of the question

5. Risk analysis in capital budgeting Projects differ in risk, and risk analysis is a critical component of the capital budgeting process. Consider the case of United Recycling Inc.: United Recycling Inc, is one of the largest recyclers of glass and paper products in the United States. The company is looking into expanding into the cardboard recycling business. The company's CFO has performed a detailed analysis of the proposed expansion The company's CFO used sophisticated software to analyze a large number of scenarios and generate estimated rates of return and risk Indexes. Based on the information given, determine which of the statements is correct O The company's CFO used a Monte Carlo simulation to evaluate the project's financial model. The company's CFO conducted a sensitivity analysis to evaluate the project's financial model. Evaluating risk is an important part of the capital budgeting process. Which of the following represents the project's risk to the corporation as opposed to investors' risks? Stand-alone risk Market, or beta, risk O Corporate, or within-firm, risk is measured by the project's impact on uncertainty regarding the firm's future returns.

Answer 1

Answering the last part:
Answer: Corporate risk or Within firm risk.

Corporate risk is measured by the project's impact on uncertainty about the firm's future earnings.

Corporate risk is the risk faced due to financial uncertainty investor faces due to due to holding a firms stock.

Note:
Observed a mistake in last but one part:

You have selected Corporate or within the firm risk. It is actually a standalone risk.

Standalone risk represents the project risk of the corporation as opposed to the investor's risk.

Standalone risk is represented by the single project of the company as opposed to the whole company risk or investors risk.

1st answer of Monte Carlo simulation seems correct.