Which of the following statements is (are) the most correct? A. Sensitivity study is a technique...
Which of the following statements is (are) the most correct?
| A. |
Sensitivity study is a technique in which key variables are changed one at a time. |
|
| B. |
Scenario study is a technique in which “bad” and “good” sets of financial circumstances are compared with a most likely situation. |
|
| C. |
Monte Carlo Simulation is a technique in which probable future events are simulated on a computer. |
|
| D. |
Breakeven is a technique to determine the level of sales at which a project would just break even. |
|
| E. |
All the above are correct. |
Homework Answers
All the above are correct.
all the statements given are correct so option e is the answer
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Which of the following statements is (are) the most correct?
A.
Sensitivity study is a technique...
Which of the following is correct? A risk evaluation tool that was developed to assign a...
Which of the following is correct? A risk evaluation tool that was developed to assign a probability and monetary impact of specified adverse events over a period of time and summarize the impact of a wide range of risk factors in a single measure? A. Monte Carlo simulation B. Scenario analysis C. Sensitivity Analysis D. Value-at-risk
Which of the following procedures does the text say is used most frequently by businesses when...
Which of the following procedures does the text say is used most frequently by businesses when they do capital budgeting analyses? Monte Carlo simulation uses a computer to generate random sets of inputs, those inputs are then used to determine a trial NPV, and a number of trial NPVs are averaged to find the project's expected NPV. Sensitivity and scenario analyses, on the other hand, require much more information regarding the input variables, including probability distributions and correlations among those...
Which of the following statements is most correct? a. The IRR method is correct under all...
Which of the following statements is most correct? a. The IRR method is correct under all circumstances when comparing mutually exclusive projects. b. The discounted payback method solves all the problems associated with the payback method. c. For independent projects, the decision to accept or reject will always be the same using either the MIRR method or the NPV method. d. All of the statements above are correct.
Which of the following statements is most correct? a. The IRR method is correct under all...
Which of the following statements is most correct? a. The IRR method is correct under all circumstances when comparing mutually exclusive projects. b. The discounted payback method solves all the problems associated with the payback method. c. For independent projects, the decision to accept or reject will always be the same using either the MIRR method or the NPV method. d. All of the statements above are correct.
which of the following statements most appropriately describes scenario analysis? A. It looks at the project...
which of the following statements most appropriately describes scenario analysis? A. It looks at the project by changing one variable at a time B. It looks at the project by changing the cost of capital over time. C. It provides the break-even levell of sales for the project D. it looks at different but logically consistent combinations of variables. E. None of these
1. Concepts used in cash flow estimation and risk analysis You can come across different situations...
1. Concepts used in cash flow estimation and risk analysis You can come across different situations in your life where the concepts from capital budgeting will help you in evaluating the situation and making calculated decisions. Consider the following situation: The following table contains five definitions or concepts. Identify the term that best corresponds to the concept or definition given. Term Concept or Definition A computer-generated probability simulation of the most likely outcome, given a set of probable future events...
Which of the following statements are true and which are false ? Correct the false one...
Which of the following statements are true and which are false ? Correct the false one a. Labor wages are a variable cost. b. A book cost is just another word for a cost that generates a cash flow. c. Total overhead costs are independent of the capacity of an operation (e.g., the size of a manufacturing plant). d. Depreciation is a type of cash flow. e. Thesizeofsunkcostsshouldnotaffecttheprojection of future cash flows. f. The sale of assets can be used...
Which of the following statements is CORRECT? a. The first, and perhaps the most critical, step...
Which of the following statements is CORRECT? a. The first, and perhaps the most critical, step in forecasting financial requirements is to forecast future sales. b. The capital intensity ratio gives us an idea of the physical condition of the firm’s fixed assets. c. Forecasted financial statements, as discussed in the text, are used primarily as a part of the managerial compensation program, where management’s historical performance is evaluated. d. Perhaps the most important step when developing forecasted financial statements...
1. Which of the following statements is (are) not correct in the context of the Delphi...
1. Which of the
following statements is (are) not correct in the context of the
Delphi forecasting methodology? The Delphi Method
involves:
a. Consulting directly with
groups of qualified individuals and then compiling their opinions
into a forecast.
b. Detailed online surveys of
experts and the compiling of their individual answers to create a
median result.
c. Forecasting future
company performance as a function of past operating and financial
data.
d. Research or planning groups
within an organization when members...
1. Which of the following statements is most correct? me money is readily available and the...
1. Which of the following statements is most correct? me money is readily available and the cost of retained earnings is usually a lot cheaper than the cost of debt financing higher . Firms often call in bonds that can be reissued at lower interest rates. Thus, bonds seling at a significant premium discount are most eligible to be called by the issuing company. c. Il a company's tax rate increases but the yield to maturity of its non-callable bonds...
Which of the following procedures does the text say is used most frequently by businesses when they do capital budgeting analyses? Monte Carlo simulation uses a computer to generate random sets of inputs, those inputs are then used to determine a trial NPV, and a number of trial NPVs are averaged to find the project's expected NPV. Sensitivity and scenario analyses, on the other hand, require much more information regarding the input variables, including probability distributions and correlations among those...
1. Concepts used in cash flow estimation and risk analysis You can come across different situations in your life where the concepts from capital budgeting will help you in evaluating the situation and making calculated decisions. Consider the following situation: The following table contains five definitions or concepts. Identify the term that best corresponds to the concept or definition given. Term Concept or Definition A computer-generated probability simulation of the most likely outcome, given a set of probable future events...
1. Which of the
following statements is (are) not correct in the context of the
Delphi forecasting methodology? The Delphi Method
involves:
a. Consulting directly with
groups of qualified individuals and then compiling their opinions
into a forecast.
b. Detailed online surveys of
experts and the compiling of their individual answers to create a
median result.
c. Forecasting future
company performance as a function of past operating and financial
data.
d. Research or planning groups
within an organization when members...
1. Which of the following statements is most correct? me money is readily available and the cost of retained earnings is usually a lot cheaper than the cost of debt financing higher . Firms often call in bonds that can be reissued at lower interest rates. Thus, bonds seling at a significant premium discount are most eligible to be called by the issuing company. c. Il a company's tax rate increases but the yield to maturity of its non-callable bonds...
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