To determine the lowest net present value that is likely to occur given a range of values for all of the relevant variables,a firm should conduct which type of analysis?

Question

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Scenario analysis involves evaluating the outcomes of different possible scenarios based on different values for relevant variables. By assessing the lowest net present value that is likely to occur across these scenarios, a firm can better prepare for potential challenges and make informed decisions. Sensitivity analysis, present value breakeven analysis, financial breakeven analysis, and cash flow breakeven analysis all have different goals and do not necessarily provide information on the lowest possible net present value.

To Determine the Lowest Net Present Value That Is Likely