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Which of the following best describes the general motivation for considering all of tools and concepts discussed in Chapter 11 (Project Analysis and Evaluation? A.

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Which of the following best describes the general motivation for considering all of tools and concepts discussed in Chapter 11 (Project Analysis and Evaluation? A. Ivaluation of a projed using Net Present value (NP) analysis requires estimation of future cash flows, which are based on many uncertain variables, indudire future quantity, fuhure price, future costs, etc. We need to consider how errors in our forecasting of these variables might affect our estimate of NPW, and therefore our decision about whether to invest in a project. order to insure our caloutations are correct, is is important that we consider many different scenarios imvolving these variables, and choose the best one to entoure that eur forecasts are correct. project is ahie to at ieast break. even on an accounting bask, and that its operating leverage is not too high Scenario and sensitivity analysis should be cohducted to enwere that all criteria are met. forscasine risk on woch arathis

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