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:

Cotton Clothes

Apparel manufactured from cotton fibers, known for their comfort, breathability, and durability.

Prices In Resource Markets

The costs associated with purchasing inputs like labor, land, and capital in markets where they are traded.

Relative Scarcity

The condition where the availability of resources is limited compared to the unlimited wants and needs.

Demand For Resource

The desire and willingness of firms or individuals to acquire resources at various price levels.