As the Degree of Sensitivity of a Project to a Single

question 13

Multiple Choice

As the degree of sensitivity of a project to a single variable rises, the:

• A) lower the forecasting risk of the project.
• B) smaller the range of possible outcomes given a pre-defined range of values for the input.
• C) more attention management should place on accurately forecasting the future value of that variable.
• D) lower the maximum potential value of the project.

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Definitions:

Fracking

A technique for extracting oil and natural gas from rock by injecting high-pressure fluid to create fractures, allowing resources to be more easily harvested.

Equilibrium Price

The price at which the quantity of a good or service demanded by consumers matches the quantity supplied by producers, resulting in market balance.

Nutella

Nutella is a brand of sweetened hazelnut cocoa spread manufactured by the Italian company Ferrero, widely popular worldwide.

Hazelnuts

Edible nuts produced by trees of the genus Corylus, known for their use in sweets and cooking.