Which of the Following Statements Regarding Linear Programming Is Best

question 34

Multiple Choice

Which of the following statements regarding linear programming is best?

• A) A parameter is also known as a decision variable.
• B) Linearity assumes proportionality and additivity.
• C) Since nonnegativity is required, parameters must be greater than or equal to zero.
• D) Linear programming ensures the decision maker will reach a single, optimal solution.

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Definitions:

Crossover Point

The point at which two or more alternative investments achieve the same cumulative cash flow or rate of return.

Mutually Exclusive

A condition where the occurrence of one event precludes the occurrence of another in decision making or statistical probability.

Discount Rate

The rate applied in DCF assessment to compute the present worth of imminent cash flows.

Internal Rate

Short for Internal Rate of Return (IRR), a financial metric used to estimate the profitability of potential investments by calculating the rate of return at which net present value of all cash flows (both positive and negative) from a project equals zero.