Question

In the Private Sector, there are many choices to be made by Business managers regarding which "projects" to borrow for and which "projects" to invest in. These choices often contain a great deal of ______________________ as well as the potential for benefits (profits).

Answer 1

Answer:

Risk (the possibility of costs being more than originally perceived)  and Uncertainty (the possibility of benefits being less than originally perceived)

Explanation:

When you borrow a certain amount of money, the value of that money will be influenced by how well the market will perform in the future. If the value of that currency dropped, the cost that you get will be higher than originally perceived because the amount of resource you can buy with the same amount of money is actually lesser than it is in the past.

In investment, you decided to inject a certain amount of capital to a business with the hopes that that they will increase in value over time due to profit or market expansion. The thing is, There is no way you can be  100% sure that the business will take off. So there will always be a factor of risk and uncertainty that could potentially make you lose your money.