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    Question

    Base case DSCR is 1.40. On 10% fall in sales, DSCR falls

    to 1.05. On 10% increase in cost, DSCR becomes 0.98. What is the correct appraisal inference?
    A Project is robust Correct Answer Incorrect Answer
    B Project is moderately safe Correct Answer Incorrect Answer
    C Project is highly sensitive and risky Correct Answer Incorrect Answer
    D Project is over-financed Correct Answer Incorrect Answer
    E Project needs only minor correction Correct Answer Incorrect Answer

    Solution

    Small changes push DSCR below 1 → high risk viability

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