Which One of the Following Assumptions Applies to a Worst

question 189

Multiple Choice

Which one of the following assumptions applies to a worst case scenario?

• A) Sales are projected using the highest expected value.
• B) The most likely level of sales is used.
• C) The best economic assumptions are made.
• D) The highest level of expansion is assumed.
• E) Costs are projected using the highest expected value.

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Definitions:

Initial Cost

The upfront expense incurred to purchase an asset or to initiate a project.

Net Present Value

A calculation that compares the value of a dollar today to the value of that same dollar in the future, taking inflation and returns into account.

Required Rate

The minimum return an investor expects to achieve when investing in a particular asset or project.

Payback Period

The duration of time it takes for an investment to generate enough revenue to recover the initial cost of the investment.