The manufacturer of a brand of kitchen knives is investigating the likely effects that an increase in the cost of the raw materials required to make these knives will have on the the cost of manufacturing the knives,the selling price of the knives,the number of knives that will then be sold,and the project's net present value (NPV).Which of the following best describes what type of analysis the manager is performing?

Question

Quizplus · Accepted Answer

Scenario analysis is a technique used to evaluate the potential impact of different scenarios on a project's outcome. In this case, the manager is evaluating the potential impact of an increase in the cost of raw materials on the cost of manufacturing, selling price, number of knives sold, and NPV.

The Manufacturer of a Brand of Kitchen Knives Is Investigating