Which of the Following Project Risk Analyses Is Best Able

question 63

Multiple Choice

Which of the following project risk analyses is best able to analyse the effect of a single set of circumstances, with correlated inputs, on the NPV of a project?

• A) sensitivity analysis
• B) scenario analysis
• C) simulation analysis
• D) none of the above

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Definitions:

Cash Price

The actual price a buyer pays in cash at the time of purchase, as opposed to credit purchase terms.

Hedge Position

An investment made to reduce the risk of adverse price movements in an asset, usually through derivatives like options or futures contracts.

Bushels

A unit of volume measurement used primarily in agriculture, particularly in the United States, for grains and other dry commodities.