Fundamentals of Corporate Finance, 12e (Ross)
Chapter 11 Project Analysis and Evaluation
1) Forecasting risk is defined as the possibility that:
A) some propod projects will be rejected.
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B) some propod projects will be temporarily delayed.
C) incorrect decisions will be made due to erroneous cash flow projections.
D) some projects will be mutually exclusive.
E) tax rates could change over the life of a project.
2) The key means of defending against forecasting risk is to:
A) rely primarily on the net prent value method of analysis.
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B) increa the discount rate assigned to a project.
C) shorten the life of a project.
D) identify sources of value within a project.
E) ignore any potential salvage value that might be realized.
3) 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 he using?
A) Simulation testing
B) Sensitivity analysis
C) Break-even analysis人大附中国际班
D) Rationing analysis
E) Scenario analysis
4) 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 asts
C) Identifying the potential range of reasonable outcomes
D) Determining the minimal level of sales required to break-even on an accounting basistwo
google在线E) Determining the minimal level of sales required to break-even on a financial basis
5) Which one of the following will be ud in the computation of the best-ca analysis of a propod project?
A) Minimal number of units that are expected to be produced and sold
pau是什么意思B) The lowest expected salvage value that can be obtained for a project's fixed asts
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
6) The ba ca values ud in scenario analysis are the values considered to be the most:
A) optimistic.
B) desired by management.
C) pessimistic.
宽容的小故事D) likely to create a positive net prent value.
siblingE) likely to occur.
7) Which of the following variables will be forecast at their highest expected level under a best-ca scenario?
A) Fixed costs and units value
B) Variable costs and sales price
C) Fixed costs and sales price
D) Salvage value and units sold
E) Initial cost and variable costs
8) When you assign the lowest anticipated sales price and the highest anticipated costs to a project, you are analyzing the project under the condition known as:
A) best-ca nsitivity analysis.
B) worst-ca nsitivity analysis.
C) best-ca scenario analysis.
D) worst-ca scenario analysis.
E) ba-ca scenario analysis.
9) Which one of the following statements concerning scenario analysis is correct?
A) The pessimistic ca scenario determines the maximum loss, in current dollars, that a firm could possibly incur from a given project.
B) Scenario analysis defines the entire range of results that could be realized from a propod investment project.
C) Scenario analysis determines which variable has the greatest impact on a project's final outcome.caterpillar怎么读
D) Scenario analysis helps managers analyze various outcomes that are possible given reasonable ranges for each of the assumptions.
E) Management is guaranteed a positive outcome for a project when the worst-ca scenario produces a positive NPV.
10) Sensitivity analysis determines the:
A) range of possible outcomes given that most variables are reliable only within a stated range.
B) degree to which the net prent value reacts to changes in a single variable.
中英在线互译C) net prent value range that can be realized from a propod project.
D) degree to which a project relies on its initial costs.
E) ideal ratio of variable costs to fixed costs for profit maximization.
11) Assume you graph a project's net prent value given various sales quantities. Which one of the following is correct regarding the resulting function?
A) The steepness of the function relates to the project's degree of operating leverage.
B) The steeper the function, the less nsitive the project is to changes in the sales quantity.
C) The resulting function will be a hyperbole.
