Monday, November 11, 2019

Which one of the following will be used in the computation of the best-case analysis of a proposed project?

Scenario analysis is best suited to accomplishing which one of the following when analyzing a project? 
 
A. 
determining how fixed costs affect NPV

B. 
estimating the residual value of fixed assets

C. 
identifying the potential range of reasonable outcomes

D. 
determining the minimal level of sales required to break-even on an accounting basis

E. 
determining the minimal level of sales required to break-even on a financial basis
Refer to section 11.2


20.
Which one of the following will be used in the computation of the best-case analysis of a proposed project? 
 
A. 
minimal number of units that are expected to be produced and sold

B. 
the lowest expected salvage value that can be obtained for a project's fixed assets

C. 
the most anticipated sales price per unit

D. 
the lowest variable cost per unit that can reasonably be expected

E. 
the highest level of fixed costs that is actually anticipated
Refer to section 11.2


21.
The base case values used in scenario analysis are the ones considered the most: 
 
A. 
optimistic.

B. 
desired by management.

C. 
pessimistic.

D. 
conducive to creating a positive net present value.

E. 
likely to occur.
Refer to section 11.2


22.
Which of the following variables will be at their highest expected level under a worst case scenario?

I. fixed cost
II. sales price
III. variable cost
IV. sales quantity 
 
A. 
I only

B. 
III only

C. 
II and III only

D. 
I and III only

E. 
I, III, and IV only
Refer to section 11.2

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