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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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