What is the total spread between the best-case profit and the worst-case loss?

What is the total spread between the best-case profit and the worst-case loss?

• A. 3,780,000
• B. 2,780,000
• C. 3,000,000
• D. 4,780,000

Answer: (A)

The concept being tested is the range of possible financial outcomes—the distance between the best-case profit and the worst-case loss. To get this spread, you take the best-case profit and add the magnitude of the worst-case loss (a loss is negative, so you subtract a negative becomes a plus). If the best-case profit is 3,000,000 and the worst-case loss is 780,000, the total spread is 3,000,000 + 780,000 = 3,780,000. This represents the maximum swing from the lowest point to the highest point across scenarios.

The concept being tested is the range of possible financial outcomes—the distance between the best-case profit and the worst-case loss. To get this spread, you take the best-case profit and add the magnitude of the worst-case loss (a loss is negative, so you subtract a negative becomes a plus). If the best-case profit is 3,000,000 and the worst-case loss is 780,000, the total spread is 3,000,000 + 780,000 = 3,780,000. This represents the maximum swing from the lowest point to the highest point across scenarios.