Which of the Following Statements Is False

question 56

Multiple Choice

Which of the following statements is false?

• A)Simulation,unlike sensitivity analysis,allows the manager to determine the effects of changing all the uncertain variables.
• B)Sensitivity analysis results can be difficult to interpret.
• C)Decision-tree analysis evaluates a series of decisions.
• D)External capital rationing refers to management'sinability to raise funds from the capital market to fund its projects.

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Definitions:

Fixed Expenses

Costs that do not change with the level of production or sales over a certain period, such as rent, salaries, and insurance.

Unit Contribution Margin

The difference between the selling price of a unit and its variable costs, indicating how much each unit contributes to covering fixed costs and generating profit.

Sales Volume

The total number of units sold within a specific period, often used as an indicator of business performance.

Variable Expense

Costs that change in proportion to the level of production or sales activity.