Why is Scenario Analysis useful?

Q: Define the Base Case and the Proposed Alternatives?

A: The base case is the output expected from the basic assumption made by the project team. The basic…

Q: Going beyond just calculating NPV, discuss it qualitatively. What is it used for? Is it a good…

A: Net present value is defined as the difference between the PV of the cash inflows as well as present…

Q: What is the best-case scenario?

A: When companies are uncertain about the details of a project such as costs, inflows, interest rate…

Q: What is horizon value?

A: Horizon value is the value of the project or the security at the end of a specified future date. The…

Q: What is Scenario Analysis?

A: Scenario analysis is an important step in the financial modelling. This is used to show the possible…

Q: How does the decision-maker use the scenario analysis?

A: Scenario analysis helps investors and analysts in making better decisions.

Q: What are the steps to figure this out?

A: Journal: Recording of a business transactions in a chronological order.

Q: What is Gordon model?

A: Intrinsic value of a stock is based on the internal information of an organization. That is, market…

Q: From where has the concept DU pont Analysis comes?what’s the formula?

A: Ratio Analysis is the method of checking the company's operational efficiency, liquidity, and…

Q: What is the Black Scholes Model?

A: Black Scholes Model is an option pricing model.

Q: What is Monte Carlo simulation?

A: The question is based on the concept of Monte Carlo simulation, the method is based on  stochastic…

Q: Explain what is risk decompositon

A: Risk is referred as the future uncertainty with reference to the deviation from an expected earnings…

Q: Why do we need stress testing and scenario analysis?

A: A stress test or scenario analysis is used to determine and analysis the outcome of a financial…

Q: Are these good advantages and disadvantages about RRSP’s? What can I include and remove?

A: RRSP or registered retirement savings plan is a retirement savings plan for employees and self…

Q: What techniques can be used to analyze real options?

A: A choice accessible to the organization's managers related to the investment opportunities is known…

Q: What are the ramifications of doing a CVP analysis

A: It   is about the ramifications of doing a CVP analysis:

Q: Why is the NPV preferred over the IRR?

A: Net Present Value is a method of finding the profitability of a project by discounting future cash…

Q: How do you explain or interpret predictive model information?

A: Meaning- Predictive Model As the name suggest, where with the help of historical figures or even…

Q: What is the big bang approach?

A:

Q: What is option?

A: Options are the derivatives contract that gives investor discretion to sell or buy the assets like…

Q: Consider REMICs?

A: A real estate mortgage investment conduit (REMIC) is a difficult puddle of mortgage securities…

Q: What role does MAD play in evaluating a forecasting model?

A: MAD refers to mean absolute deviation. It is also known as average absolute deviation which is the…

Q: Which of the following value is concerned with the way we approach the end states?

A: Option a

Q: What are the implications of CVP analysis?

A: The CVP analysis stands for cost volume profit analysis.

Q: What are the advantages and disadvantages of  LIFO?

A: Last-in-First-Out: In Last-in-First Out method, the costs of last purchased items are considered as…

Q: How are Sensitivty Analysis and Scenario Analysis different in details?

A: Sensitivity analysis is the evaluation of the impact on the project when there may be a few…

Q: What are ESOPs? What are some of their advantages anddisadvantages?

A: ESOP: Employee stock ownership plan is retirement plans for employees of the company wherein the…

Q: What is Sensitivity Analysis and why is it useful?

A: The sensitivity analysis is utilized to comprehend the impact of a lot of autonomous factors on some…

Q: Differentiate between sensitivity analysis and scenario analysis.What advantage does scenario…

A: Differentiate between sensitivity analysis and scenario analysis: Scenario analysis involves…

Q: d. What is the expected value of perfect information?

A: The expected value of perfect information is the price that a healthcare decision-maker would be…

Q: Explain Expectations Theory?

A: Expectations theory attempts to predict what short-term interest rates will be in the future based…

Q: payback period, NPV, and IRR always lead to the same decision? Why or why not? If not, which one…

A: Step 1   One of the most essential choices a business owner or management will ever make is capital…

Q: Define scenario analysis

A: Scenario means a situation or circumstance which is influenced by various factors. Various if and…

Q: What is a real option?

A: Real option It may be a selection made open to a firm's supervisors approximately the commerce…

Q: When we work with the breakeven point, how important is it to understand what a decision variable…

A: The question is related to Marginal Costing. The break-even point is that level of sales at which…

Q: What differential analysis and why would we use it?

A: Decision making is the process of taking the decisions based on the costs and different kind of…

Q: What is the replacement analysis?

A: Replacement analysis is one of the keys examinations in capital budgeting.

Q: Explain how Naics Works?

A: OMB created NAICS as a standard for Federal statistical agencies to use in identifying businesses…

Q: What is a feasibility study?

A: Feasibility study is a scientific program. Venture achievement proportion  is decided by Project…

Q: Describe the procedure to obtain the best-case NPW with scenario analysis?

A: Scenario analysis is a technique to break down and survey potential events that may happen later on…

Q: Explain real options

A: Introduction: Options are one of the derivative contracts which involve two parties, contract buyer…

Q: What advantage does scenario analysis have over sensitivityanalysis?

A: In finance, we are required to analyze the change in value of one variable over the change in the…

Q: research methodology?

A: Research methodology is a technique which is used to identify, select, analyze the information.…