Which of the Following Statements Is NOT Accurate Regarding Scenario

question 164

Multiple Choice

Which of the following statements is NOT accurate regarding scenario analysis?

• A) A positive NPV for a project's worst case scenario means it is likely the project will in fact offer a positive return.
• B) The worst case scenario is used to identify the point at which a project's NPV becomes negative.
• C) The base case scenario generally represents an average estimate of NPV.
• D) If the NPV of the best case scenario is negative then it is likely unnecessary to create base and worst case scenarios.
• E) Scenario analysis is likely not as effective as sensitivity analysis for determining which variables have the greatest impact on projected NPVs.