Which One of the Following Statements Concerning Scenario Analysis Is

question 50

Multiple Choice

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

• A) The pessimistic case scenario determines the maximum loss, in current dollars, that a firm could possibly incur from a given project.
• B) Scenario analysis defines the entire range of results that could be realized from a proposed investment project.
• C) Scenario analysis determines which variable has the greatest impact on a project's final outcome.
• D) Scenario analysis helps managers analyze various outcomes that are possible given reasonable ranges for each of the assumptions.
• E) Management is guaranteed a positive outcome for a project when the worst-case scenario produces a positive NPV.

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