Monday, November 11, 2019

Which type of analysis identifies the variable, or variables, that are most critical to the success of a particular project?

As the degree of sensitivity of a project to a single variable rises, the: 
 
A. 
less important the variable to the final outcome of the project.

B. 
less volatile the project's net present value to that variable.

C. 
greater the importance of accurately predicting the value of that variable.

D. 
greater the sensitivity of the project to the other variable inputs.

E. 
less volatile the project's outcome.
Refer to section 11.2


28.
Sensitivity analysis is based on: 
 
A. 
varying a single variable and measuring the resulting change in the NPV of a project.

B. 
applying differing discount rates to a project's cash flows and measuring the effect on the NPV.

C. 
expanding and contracting the number of years for a project to determine the optimal project length.

D. 
the best, worst, and most expected situations.

E. 
various states of the economy and the probability of each state occurring.
Refer to section 11.2


29.
Which type of analysis identifies the variable, or variables, that are most critical to the success of a particular project? 
 
A. 
leverage

B. 
risk

C. 
break-even

D. 
sensitivity

E. 
cash flow
Refer to section 11.2


30.
Simulation analysis is based on assigning a _____ and analyzing the results. 
 
A. 
narrow range of values to a single variable

B. 
narrow range of values to multiple variables simultaneously

C. 
wide range of values to a single variable

D. 
wide range of values to multiple variables simultaneously

E. 
single value to each of the variables
Refer to section 11.2

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