Which of the following quantitative risk analysis techniques relies upon the calculation of net present value to determine if a project should be pursued or abandoned?
A) Failure Mode and Effects Analysis (FMEA)
B) Fault Tree Analysis
C) Financial Engineering
D) Sunk Cost Analysis

Question

Quizplus · Accepted Answer

Financial Engineering techniques typically involve the use of financial models to assess the risk and potential return on investment for a project. Net present value (NPV) is a common calculation used in financial engineering to determine the present value of cash inflows and outflows associated with a project. If the NPV is positive, it indicates that the project is expected to generate a return on investment and should be pursued, whereas a negative NPV suggests that the project should be abandoned.

Which of the Following Quantitative Risk Analysis Techniques Relies Upon