Please explain and show all work

Question 2: Risk and Financial Analysis

There is always uncertainty when we forecast or estimate future revenues and costs. The totality of the uncertainty can roughly be captured as:

U_{Tot} = U{U_{E1}, U_{E2}, U_{I1}, U_{I2}, U_{I3}, U_{IS}}

Where:

U_{Tot} Constructed estimate of the total uncertainty related to a decision based on typical financial analysis approaches

U_{E1} Unknown factors not considered in our financial models

U_{E2} Factors that are known but not incorporated into our financial models

U_{I1} Factors that are known and incorporated into our financial models that have a known degree of uncertainty surrounding them

U_{I2} Factors that are known and incorporated into our financial models for which we fail to recognize the full nature of their uncertainty

U_{I3} Factors that are known and incorporated into our financial models that have little or no uncertainty, but we erroneously assume to have a significant degree of surrounding them

U_{IS} Uncertainty related to the structure of the financial models that we use in out analysis

How will these differing "sources" of uncertainty impact our decision-making ability?

How might we deal with the different forms of uncertainty?