Forecasting Risk Is Defined as The

question 23

Multiple Choice

Forecasting risk is defined as the:

• A) Potential for the net income projections of a project to be erroneous.
• B) Investigation of what happens to net present value when one estimated value is changed.
• C) Possibility that errors in projected cash flows will result in incorrect decisions.
• D) Study of how changes in variable costs affect the net present value of a project.
• E) Analysis of how the break-even point moves as the contribution margin changes over time.

---

Definitions:

Tax

Mandatory financial charges imposed by a government on individuals and organizations to fund public expenditures.

Market Price

The current price at which a good or service can be bought or sold, determined by the balance of supply and demand in the market.

Consumer Surplus

The differential in the total price consumers are interested and capable of paying for a product or service and the actual price paid.

Producer Surplus

The gap between the price sellers are ready to accept for a good and the actual price obtained.