VD Ltd needs to choose from three mutually exclusive projects. The net cash flows from the projects will depend on market demand. All of the projects will last for only one year. The forecast net cash flows and their associated probabilities are given below: Market Demand                  Probability        Weak                                0.20      Average                              0.50      Good                                  0.30 Market Demand                  Project A       Project B        Project C         Weak                            R450 000      R350 000       R550 000       Average                          R550 000      R400 000       R500 000         Good                            R650 000       R450 000       R700 000 Required: Calculate the expected value of the net cash flows from each of the three proj

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Risk Management Techniques

Risk management is the procedure of recognizing, analyzing, monitoring, and preventing the risks and threatening factors of investments and business. Risks can arise from various factors including internal controls, market changes, natural disasters, and failure in productions. Risk management techniques enable entities to control and minimize the risks as well as the threatening factors of the business and it also helps to improve the business.