Using an investment model and parameter estimates, the overall impact of risks on the whole-life net present value (NPV) of the investment should be determined. This may be achieved by calculating the NPV for each possible combination of risk impacts (i.e. all scenarios considered for the purpose of the analysis) or by producing a statistical distribution of the NPV using a computer-based Monte Carlo simulation. Either way the result will be a probability distribution of the project's NPVs, showing the likelihood that each of the calculated NPVs will occur.

Generally, the larger the potential financial outcome, the more serious the potential consequences of volatility in the estimated NPV; and therefore the more important it is to attempt to reduce the downside volatility, even though this is likely to be at the expense of a reduction in the expected NPV.

A preliminary assessment will then be made of the extent to which the major risks can be mitigated and the results will be recorded in the risk register. The aim at this stage will be limited to establishing whether optional courses of action exist which, on the face of it, may reduce the major risks to acceptable levels.

An overall preliminary judgement should also be made as to whether the project looks like being sufficiently profitable to justify further analysis, having regard to the expected value of the NPV, the degree of confidence one can put in it, and other factors. Assuming that there are good prospects for mitigating the major risks and that the project still appears likely to be profitable, the next stage is to proceed with planning risk mitigation in some detail.