Abstract
Future cash flows are rarely known with certainty. A number of simple methods have been devised, and are widely used, to make some allowance for the risk and uncertainty involved in most industrial ventures. As will be shown, none of these methods is perfect, though they do have the advantage of easy application.
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Notes
The presence and importance of correlation between assets had been demonstrated in an important paper by A. D. Roy, ‘Safety First and the Holding of Assets’, Econometrica (July 1952).
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© 1971 C. J. Hawkins and D. W. Pearce
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Hawkins, C.J., Pearce, D.W. (1971). Risk. In: Capital Investment Appraisal. Macmillan Studies in Economics. Palgrave, London. https://doi.org/10.1007/978-1-349-01036-3_6
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DOI: https://doi.org/10.1007/978-1-349-01036-3_6
Publisher Name: Palgrave, London
Print ISBN: 978-1-349-01038-7
Online ISBN: 978-1-349-01036-3
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