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Question
Natick Nurseries has used scenario analysis to evaluate the purchase of a former dairy to use for nursery stock. The best case scenario produced a very favorable NPV of $4,000,000; the NPV of the most likely case was $2,000,000, but the worst case scenario resulted in an NPV of $(3,000,000) which would bring the company close to bankruptcy. Natick could improve its decision by:A) using sensitivity analysis.
B) using simulation analysis.
C) simply accepting the best case scenario and rejecting the other outcomes.
D) weighting the favorable scenarios more heavily to increase the expected NPV.
Answer
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Related questions
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