Use the Following Two Statements to Answer This Question

question 23

Multiple Choice

Use the following two statements to answer this question:
I.Sensitivity analysis examines how an investment's NPV changes as we change the values of more than one input variable at a time.
II.Scenario analysis examines how an investment's NPV changes as we change the value of one input variable at a time.

• A)I and II are correct.
• B)I and II are incorrect.
• C)I is correct, II is incorrect.
• D)I is incorrect, II is correct.

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Definitions:

Adjusting Entry

Journal entries made in the accounting records at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.

Written Instrument

A legal document delineating rights, duties, or liabilities, often used in financial and property transactions.

Formal

Pertains to actions, processes, or documents that are done in accordance with established or conventional rules.

Note Receivable

A financial asset representing a written promise to receive a specific sum of money at a future date.