Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
Chapter 11
Project Analysis and Evaluation
Multiple Choice Questions
1.
Forecasting risk is defined as the possibility that:
2.
Scenario analysis is defined as the:
3.
An analysis of the change in a project's NPV when a single variable is
changed is called _____ analysis.
4.
An analysis which combines scenario analysis with sensitivity analysis is
called _____ analysis.
5.
Variable costs can be defined as the costs that:
6.
Fixed costs:
7.
The change in revenue that occurs when one more unit of output is sold is
referred to as:
8.
The change in variable costs that occurs when production is increased by
one unit is referred to as the:
9.
By definition, which one of the following must equal zero at the accounting
break-even point?
10.
By definition, which one of the following must equal zero at the cash break-
even point?
11.
Which one of the following is defined as the sales level that corresponds to
a zero NPV?
12.
Operating leverage is the degree of dependence a firm places on its:
13.
Which one of the following is the relationship between the percentage
change in operating cash flow and the percentage change in quantity sold?
14.
Bell Weather Goods has several proposed independent projects that have
positive NPVs. However, the firm cannot initiate any of the projects due to a
lack of financing. This situation is referred to as:
15.
The procedure of allocating a fixed amount of funds for capital spending to
each business unit is called:
16.
PC Enterprises wants to commence a new project but is unable to obtain
the financing under any circumstances. This firm is facing:
17.
Forecasting risk emphasizes the point that the correctness of any decision
to accept or reject a project is highly dependent upon the:
18.
Steve is fairly cautious when analyzing a new project and thus he projects
the most optimistic, the most realistic, and the most pessimistic outcome
that can reasonably be expected. Which type of analysis is Steve using?
19.
Scenario analysis is best suited to accomplishing which one of the following
when analyzing a project?
20.
Which one of the following will be used in the computation of the best-case
analysis of a proposed project?
