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

question 235

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.

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Definitions:

Observers

Individuals or entities that watch or monitor events, behaviors, or processes, often for the purpose of drawing conclusions or gathering information.

Graded

Evaluated or classified according to a scale or standard.

Reliability

The quality of being dependable and consistent in performance or results.

Selection Technique

A method or process used in hiring, such as interviews or tests, to identify the most suitable candidates for a position based on their skills, experience, and attributes.