Scenario Analysis for a Proposed New Project Has Resulted in the Following

question 84

Multiple Choice

Scenario analysis for a proposed new project has resulted in the following: $\begin{array}{lll}& \text { NPV } & \text { Probability } \\\text { Worst case } & (\$ 1,000) & .2 \\\text { Most likely case } & \$ 300 & 3 \\\text { Rest case. } & \$ 600 & 5\end{array}$ An abandonment option would change the NPV in the worst case to ($300) . The value of the option is at least:

• A) $190.
• B) $330.
• C) $140.
• D) $470.

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Definitions:

Standard Deviations

A statistical measure that quantifies the amount of variation or dispersion of a set of data values from the mean.

Normal Distribution

A bell-shaped frequency distribution curve where most occurrences take place in the middle of the range and taper off symmetrically towards extremes.

Marlowe-Crowne Scale

A psychological questionnaire measuring social desirability bias, indicating how much people's responses are influenced by wanting to be perceived favorably.

Internal Reliability

A measure of the consistency of responses across items within a test or survey.