If Sensitivity Analysis Indicates None of the Individual Variables Will

question 50

Multiple Choice

If sensitivity analysis indicates none of the individual variables will cause a negative NPV under pessimistic conditions, then the:

• A)project is assured to be successful.
• B)project's discount rate should be reduced.
• C)economic forecasts are possibly overly optimistic.
• D)interaction of the variables should be considered.

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Definitions:

Negotiable Instrument

A written document guaranteeing the payment of a specific amount of money, either on demand or at a set time, with the name of the payer and payee.

Promissory Note

A financial instrument containing a written promise by one party to pay another party a definite sum of money either on demand or at a specified future date.

Banker's Acceptance

A short-term debt instrument issued by a company that is guaranteed by a commercial bank.

Bills Of Exchange Act

Legislation that governs the creation, transfer, and payment of bills of exchange, a type of negotiable instrument.