Which One of the Following Statements Concerning Scenario Analysis of a Proposed

question 317

Multiple Choice

Which one of the following statements concerning scenario analysis of a proposed project is correct?

• A) The worst case scenario determines the net present value of a project given that a natural disaster occurs.
• B) Scenario analysis assures a firm that the actual results of a project will lie within the range of returns as computed under the best and the worst case scenarios.
• C) Scenario analysis provides a clear signal to management to either accept or reject a project.
• D) Scenario analysis only provides management with a glimpse of the possible range of outcomes that could result should a project be accepted.
• E) When the base case scenario results in a positive net present value, management can be assured that the proposed project will meet or exceed their expectations.

---

Definitions:

Hepatomegaly

An abnormal enlargement of the liver, which can be an indicator of various diseases or conditions.

Dullness

A lack of sharpness or vibrancy in sensation, often used in medical contexts to describe a type of sound heard during percussion of the body that suggests an underlying condition or abnormality.

Alcohol Intake

The consumption of beverages that contain ethanol, commonly referred to as alcohol, which can have various health impacts.