Quiz Ch 10 – T/F Sensitivity Analysis and Variable Interrelationships
Fundamentals of Corporate Finance
Brealey, Myers, and Marcus
10th Edition
True or false: In sensitivity analysis, the interconnections between variables are accounted.
True or false: In sensitivity analysis, the interconnections between variables are accounted.
True or false: Scenario analysis aims to recreate and evaluate historical events while sensitivity analysis focuses on the future.
True or false: Diverging interests between shareholders and managers can lead to the rejection of attractive capital budgeting proposals.
True or false: A “bottom-up” methodology is employed when strategic planning is involved within the capital budgeting process.
True or false: What-if analysis is NOT integral to the process of capital budgeting.
True or false: “What-if” questions seek to understand how a project will perform under diverse scenarios.
True or false: A roster of suggested investments is found in a capital budget.
True or false: The influence of the time value of money results in the accounting break-even sales volume exceeding the NPV break-even sales volume.
When does the option to abandon a project at a low cost hold significant value?
Which modification could change a project with a negative NPV into one with a positive NPV?